Correlation Between New China and Runjian Communication
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By analyzing existing cross correlation between New China Life and Runjian Communication Co, you can compare the effects of market volatilities on New China and Runjian Communication and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in New China with a short position of Runjian Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Runjian Communication.
Diversification Opportunities for New China and Runjian Communication
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Runjian is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Runjian Communication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runjian Communication and New China is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on New China Life are associated (or correlated) with Runjian Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runjian Communication has no effect on the direction of New China i.e., New China and Runjian Communication go up and down completely randomly.
Pair Corralation between New China and Runjian Communication
If you would invest 3,525 in Runjian Communication Co on September 10, 2024 and sell it today you would lose (422.00) from holding Runjian Communication Co or give up 11.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 0.36% |
Values | Daily Returns |
New China Life vs. Runjian Communication Co
Performance |
Timeline |
New China Life |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Runjian Communication |
New China and Runjian Communication Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New China and Runjian Communication
The main advantage of trading using opposite New China and Runjian Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Runjian Communication can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Runjian Communication will offset losses from the drop in Runjian Communication's long position.New China vs. Tibet Huayu Mining | New China vs. Linzhou Heavy Machinery | New China vs. Shenzhen Zhongzhuang Construction | New China vs. Qinghaihuading Industrial Co |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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