Correlation Between China Merchants and Ningbo Fangzheng
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By analyzing existing cross correlation between China Merchants Shekou and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on China Merchants and Ningbo Fangzheng 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 China Merchants with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Ningbo Fangzheng.
Diversification Opportunities for China Merchants and Ningbo Fangzheng
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Ningbo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and China Merchants 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 China Merchants Shekou are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of China Merchants i.e., China Merchants and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between China Merchants and Ningbo Fangzheng
Assuming the 90 days trading horizon China Merchants Shekou is expected to generate 0.78 times more return on investment than Ningbo Fangzheng. However, China Merchants Shekou is 1.29 times less risky than Ningbo Fangzheng. It trades about 0.16 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about 0.11 per unit of risk. If you would invest 883.00 in China Merchants Shekou on September 2, 2024 and sell it today you would earn a total of 295.00 from holding China Merchants Shekou or generate 33.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| China Merchants Shekou |
| Ningbo Fangzheng Aut |
China Merchants and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Ningbo Fangzheng
The main advantage of trading using opposite China Merchants and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Ningbo Fangzheng 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 Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| China Merchants vs. ChengDu Hi Tech Development | China Merchants vs. FSPG Hi Tech Co | China Merchants vs. Sunwave Communications Co | China Merchants vs. Zhejiang JIULI Hi tech |
| Ningbo Fangzheng vs. Guangdong Xiongsu Technology | Ningbo Fangzheng vs. Bengang Steel Plates | Ningbo Fangzheng vs. Maxvision Technology Corp | Ningbo Fangzheng vs. Tianshui Huatian Technology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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