This module allows you to analyze existing cross correlation between NQPH and NQTH. You can compare the effects of market volatilities on NQPH and NQTH 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 NQPH with a short position of NQTH. See also your portfolio center. Please also check ongoing floating volatility patterns of NQPH and NQTH.
Assuming 30 trading days horizon, NQPH is expected to generate 1.02 times more return on investment than NQTH. However, NQPH is 1.02 times more volatile than NQTH. It trades about -0.08 of its potential returns per unit of risk. NQTH is currently generating about -0.21 per unit of risk. If you would invest 101,182 in NQPH on June 15, 2018 and sell it today you would lose (2,295) from holding NQPH or give up 2.27% of portfolio value over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding NQPH and NQTH in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on NQTH and NQPH 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 NQPH are associated (or correlated) with NQTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NQTH has no effect on the direction of NQPH i.e. NQPH and NQTH go up and down completely randomly.
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