Correlation Between Shenzhen SDG and Ningbo Construction
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By analyzing existing cross correlation between Shenzhen SDG Information and Ningbo Construction Co, you can compare the effects of market volatilities on Shenzhen SDG and Ningbo Construction 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 Shenzhen SDG with a short position of Ningbo Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and Ningbo Construction.
Diversification Opportunities for Shenzhen SDG and Ningbo Construction
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Ningbo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Information and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction and Shenzhen SDG 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 Shenzhen SDG Information are associated (or correlated) with Ningbo Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Shenzhen SDG i.e., Shenzhen SDG and Ningbo Construction go up and down completely randomly.
Pair Corralation between Shenzhen SDG and Ningbo Construction
Assuming the 90 days trading horizon Shenzhen SDG is expected to generate 1.67 times less return on investment than Ningbo Construction. In addition to that, Shenzhen SDG is 1.44 times more volatile than Ningbo Construction Co. It trades about 0.01 of its total potential returns per unit of risk. Ningbo Construction Co is currently generating about 0.03 per unit of volatility. If you would invest 416.00 in Ningbo Construction Co on September 14, 2024 and sell it today you would earn a total of 82.00 from holding Ningbo Construction Co or generate 19.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen SDG Information vs. Ningbo Construction Co
Performance |
| Timeline |
| Shenzhen SDG Information |
| Ningbo Construction |
Shenzhen SDG and Ningbo Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen SDG and Ningbo Construction
The main advantage of trading using opposite Shenzhen SDG and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG position performs unexpectedly, Ningbo Construction 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 Ningbo Construction will offset losses from the drop in Ningbo Construction's long position.| Shenzhen SDG vs. Industrial and Commercial | Shenzhen SDG vs. China Construction Bank | Shenzhen SDG vs. Bank of China | Shenzhen SDG vs. Agricultural Bank of |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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