Correlation Between China Merchants and Ningbo Tip
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By analyzing existing cross correlation between China Merchants Shekou and Ningbo Tip Rubber, you can compare the effects of market volatilities on China Merchants and Ningbo Tip 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 Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Ningbo Tip.
Diversification Opportunities for China Merchants and Ningbo Tip
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Ningbo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Ningbo Tip Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tip Rubber 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 Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tip Rubber has no effect on the direction of China Merchants i.e., China Merchants and Ningbo Tip go up and down completely randomly.
Pair Corralation between China Merchants and Ningbo Tip
Assuming the 90 days trading horizon China Merchants Shekou is expected to under-perform the Ningbo Tip. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Shekou is 1.18 times less risky than Ningbo Tip. The stock trades about 0.0 of its potential returns per unit of risk. The Ningbo Tip Rubber is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,663 in Ningbo Tip Rubber on September 2, 2024 and sell it today you would lose (270.00) from holding Ningbo Tip Rubber or give up 16.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. Ningbo Tip Rubber
Performance |
| Timeline |
| China Merchants Shekou |
| Ningbo Tip Rubber |
China Merchants and Ningbo Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Ningbo Tip
The main advantage of trading using opposite China Merchants and Ningbo Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Ningbo Tip 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 Tip will offset losses from the drop in Ningbo Tip'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 Tip vs. BYD Co Ltd | Ningbo Tip vs. China Mobile Limited | Ningbo Tip vs. Agricultural Bank of | Ningbo Tip vs. Industrial and Commercial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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