Correlation Between Xian International and Ningbo MedicalSystem
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By analyzing existing cross correlation between Xian International Medical and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Xian International and Ningbo MedicalSystem 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 Xian International with a short position of Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xian International and Ningbo MedicalSystem.
Diversification Opportunities for Xian International and Ningbo MedicalSystem
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xian and Ningbo is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Xian International Medical and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem and Xian International 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 Xian International Medical are associated (or correlated) with Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Xian International i.e., Xian International and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Xian International and Ningbo MedicalSystem
Assuming the 90 days trading horizon Xian International Medical is expected to under-perform the Ningbo MedicalSystem. In addition to that, Xian International is 1.27 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about -0.07 of its total potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about 0.04 per unit of volatility. If you would invest 1,168 in Ningbo MedicalSystem Biotechnology on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Ningbo MedicalSystem Biotechnology or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xian International Medical vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Xian International |
| Ningbo MedicalSystem |
Xian International and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xian International and Ningbo MedicalSystem
The main advantage of trading using opposite Xian International and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xian International position performs unexpectedly, Ningbo MedicalSystem 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 MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.The idea behind Xian International Medical and Ningbo MedicalSystem Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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