Correlation Between Ningbo Kangqiang and HeBei Jinniu
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By analyzing existing cross correlation between Ningbo Kangqiang Electronics and HeBei Jinniu Chemical, you can compare the effects of market volatilities on Ningbo Kangqiang and HeBei Jinniu 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 HeBei Jinniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Kangqiang and HeBei Jinniu.
Diversification Opportunities for Ningbo Kangqiang and HeBei Jinniu
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and HeBei is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Kangqiang Electronics and HeBei Jinniu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeBei Jinniu Chemical 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 HeBei Jinniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeBei Jinniu Chemical has no effect on the direction of Ningbo Kangqiang i.e., Ningbo Kangqiang and HeBei Jinniu go up and down completely randomly.
Pair Corralation between Ningbo Kangqiang and HeBei Jinniu
Assuming the 90 days trading horizon Ningbo Kangqiang Electronics is expected to generate 1.04 times more return on investment than HeBei Jinniu. However, Ningbo Kangqiang is 1.04 times more volatile than HeBei Jinniu Chemical. It trades about 0.08 of its potential returns per unit of risk. HeBei Jinniu Chemical is currently generating about 0.08 per unit of risk. If you would invest 1,533 in Ningbo Kangqiang Electronics on October 30, 2024 and sell it today you would earn a total of 180.00 from holding Ningbo Kangqiang Electronics or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Kangqiang Electronics vs. HeBei Jinniu Chemical
Performance |
| Timeline |
| Ningbo Kangqiang Ele |
| HeBei Jinniu Chemical |
Ningbo Kangqiang and HeBei Jinniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Kangqiang and HeBei Jinniu
The main advantage of trading using opposite Ningbo Kangqiang and HeBei Jinniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Kangqiang position performs unexpectedly, HeBei Jinniu 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 HeBei Jinniu will offset losses from the drop in HeBei Jinniu's long position.| Ningbo Kangqiang vs. Wuxi Xuelang Environmental | Ningbo Kangqiang vs. Baoshan Iron Steel | Ningbo Kangqiang vs. GreenTech Environmental Co | Ningbo Kangqiang vs. CareRay Digital Medical |
| HeBei Jinniu vs. Chengtun Mining Group | HeBei Jinniu vs. Huaibei Mining Holdings | HeBei Jinniu vs. Zijin Mining Group | HeBei Jinniu vs. Hainan Mining Co |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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