Correlation Between Shenyang Huitian and Ningbo Thermal
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By analyzing existing cross correlation between Shenyang Huitian Thermal and Ningbo Thermal Power, you can compare the effects of market volatilities on Shenyang Huitian and Ningbo Thermal 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 Shenyang Huitian with a short position of Ningbo Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Huitian and Ningbo Thermal.
Diversification Opportunities for Shenyang Huitian and Ningbo Thermal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenyang and Ningbo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Huitian Thermal and Ningbo Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Thermal Power and Shenyang Huitian 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 Shenyang Huitian Thermal are associated (or correlated) with Ningbo Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Thermal Power has no effect on the direction of Shenyang Huitian i.e., Shenyang Huitian and Ningbo Thermal go up and down completely randomly.
Pair Corralation between Shenyang Huitian and Ningbo Thermal
Assuming the 90 days trading horizon Shenyang Huitian Thermal is expected to generate 1.76 times more return on investment than Ningbo Thermal. However, Shenyang Huitian is 1.76 times more volatile than Ningbo Thermal Power. It trades about 0.18 of its potential returns per unit of risk. Ningbo Thermal Power is currently generating about 0.21 per unit of risk. If you would invest 275.00 in Shenyang Huitian Thermal on September 12, 2024 and sell it today you would earn a total of 109.00 from holding Shenyang Huitian Thermal or generate 39.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.28% |
| Values | Daily Returns |
Shenyang Huitian Thermal vs. Ningbo Thermal Power
Performance |
| Timeline |
| Shenyang Huitian Thermal |
| Ningbo Thermal Power |
Shenyang Huitian and Ningbo Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Huitian and Ningbo Thermal
The main advantage of trading using opposite Shenyang Huitian and Ningbo Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Huitian position performs unexpectedly, Ningbo Thermal 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 Thermal will offset losses from the drop in Ningbo Thermal's long position.| Shenyang Huitian vs. Zhangjiagang Freetrade Science | Shenyang Huitian vs. Citic Guoan Wine | Shenyang Huitian vs. YiDong Electronics Technology | Shenyang Huitian vs. Success Electronics |
| Ningbo Thermal vs. Bank of China | Ningbo Thermal vs. Kweichow Moutai Co | Ningbo Thermal vs. PetroChina Co Ltd | Ningbo Thermal vs. Bank of Communications |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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