Correlation Between Cangzhou Mingzhu and Ningbo Tip
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By analyzing existing cross correlation between Cangzhou Mingzhu Plastic and Ningbo Tip Rubber, you can compare the effects of market volatilities on Cangzhou Mingzhu 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 Cangzhou Mingzhu with a short position of Ningbo Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cangzhou Mingzhu and Ningbo Tip.
Diversification Opportunities for Cangzhou Mingzhu and Ningbo Tip
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cangzhou and Ningbo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cangzhou Mingzhu Plastic 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 Cangzhou Mingzhu 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 Cangzhou Mingzhu Plastic 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 Cangzhou Mingzhu i.e., Cangzhou Mingzhu and Ningbo Tip go up and down completely randomly.
Pair Corralation between Cangzhou Mingzhu and Ningbo Tip
Assuming the 90 days trading horizon Cangzhou Mingzhu Plastic is expected to generate 0.9 times more return on investment than Ningbo Tip. However, Cangzhou Mingzhu Plastic is 1.11 times less risky than Ningbo Tip. It trades about 0.22 of its potential returns per unit of risk. Ningbo Tip Rubber is currently generating about 0.16 per unit of risk. If you would invest 354.00 in Cangzhou Mingzhu Plastic on September 3, 2024 and sell it today you would earn a total of 43.00 from holding Cangzhou Mingzhu Plastic or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cangzhou Mingzhu Plastic vs. Ningbo Tip Rubber
Performance |
| Timeline |
| Cangzhou Mingzhu Plastic |
| Ningbo Tip Rubber |
Cangzhou Mingzhu and Ningbo Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cangzhou Mingzhu and Ningbo Tip
The main advantage of trading using opposite Cangzhou Mingzhu and Ningbo Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cangzhou Mingzhu 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.| Cangzhou Mingzhu vs. Gansu Jiu Steel | Cangzhou Mingzhu vs. Ming Yang Smart | Cangzhou Mingzhu vs. Aba Chemicals Corp | Cangzhou Mingzhu vs. Loctek Ergonomic Technology |
| Ningbo Tip vs. PetroChina Co Ltd | Ningbo Tip vs. China Mobile Limited | Ningbo Tip vs. Industrial and Commercial | Ningbo Tip vs. China Life Insurance |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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