Correlation Between Ningbo Kangqiang and Hengli Industrial
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By analyzing existing cross correlation between Ningbo Kangqiang Electronics and Hengli Industrial Development, you can compare the effects of market volatilities on Ningbo Kangqiang and Hengli Industrial 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 Ningbo Kangqiang with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Kangqiang and Hengli Industrial.
Diversification Opportunities for Ningbo Kangqiang and Hengli Industrial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ningbo and Hengli is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Kangqiang Electronics and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Ningbo Kangqiang 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 Ningbo Kangqiang Electronics are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Ningbo Kangqiang i.e., Ningbo Kangqiang and Hengli Industrial go up and down completely randomly.
Pair Corralation between Ningbo Kangqiang and Hengli Industrial
Assuming the 90 days trading horizon Ningbo Kangqiang is expected to generate 1.15 times less return on investment than Hengli Industrial. In addition to that, Ningbo Kangqiang is 1.75 times more volatile than Hengli Industrial Development. It trades about 0.1 of its total potential returns per unit of risk. Hengli Industrial Development is currently generating about 0.2 per unit of volatility. If you would invest 211.00 in Hengli Industrial Development on November 5, 2024 and sell it today you would earn a total of 19.00 from holding Hengli Industrial Development or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Kangqiang Electronics vs. Hengli Industrial Development
Performance |
| Timeline |
| Ningbo Kangqiang Ele |
| Hengli Industrial |
Ningbo Kangqiang and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Kangqiang and Hengli Industrial
The main advantage of trading using opposite Ningbo Kangqiang and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Kangqiang position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| Ningbo Kangqiang vs. Nanjing Putian Telecommunications | Ningbo Kangqiang vs. Cloud Live Technology | Ningbo Kangqiang vs. Shenzhen Coship Electronics | Ningbo Kangqiang vs. Shenzhen Hifuture Electric |
| Hengli Industrial vs. Hainan Haiqi Transportation | Hengli Industrial vs. Guangdong Silvere Sci | Hengli Industrial vs. Shuhua Sports Co | Hengli Industrial vs. Fujian Oriental Silver |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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