Correlation Between Shenzhen Clou and Ningbo Homelink
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By analyzing existing cross correlation between Shenzhen Clou Electronics and Ningbo Homelink Eco iTech, you can compare the effects of market volatilities on Shenzhen Clou and Ningbo Homelink 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 Shenzhen Clou with a short position of Ningbo Homelink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Clou and Ningbo Homelink.
Diversification Opportunities for Shenzhen Clou and Ningbo Homelink
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Ningbo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Clou Electronics and Ningbo Homelink Eco iTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Homelink Eco and Shenzhen Clou 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 Shenzhen Clou Electronics are associated (or correlated) with Ningbo Homelink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Homelink Eco has no effect on the direction of Shenzhen Clou i.e., Shenzhen Clou and Ningbo Homelink go up and down completely randomly.
Pair Corralation between Shenzhen Clou and Ningbo Homelink
Assuming the 90 days trading horizon Shenzhen Clou Electronics is expected to under-perform the Ningbo Homelink. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Clou Electronics is 1.43 times less risky than Ningbo Homelink. The stock trades about -0.27 of its potential returns per unit of risk. The Ningbo Homelink Eco iTech is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,697 in Ningbo Homelink Eco iTech on October 29, 2024 and sell it today you would lose (113.00) from holding Ningbo Homelink Eco iTech or give up 6.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Clou Electronics vs. Ningbo Homelink Eco iTech
Performance |
| Timeline |
| Shenzhen Clou Electronics |
| Ningbo Homelink Eco |
Shenzhen Clou and Ningbo Homelink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Clou and Ningbo Homelink
The main advantage of trading using opposite Shenzhen Clou and Ningbo Homelink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Clou position performs unexpectedly, Ningbo Homelink 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 Homelink will offset losses from the drop in Ningbo Homelink's long position.| Shenzhen Clou vs. Jinlong Machinery Electronic | Shenzhen Clou vs. Tsingtao Brewery Co | Shenzhen Clou vs. Guangzhou Zhujiang Brewery | Shenzhen Clou vs. China World Trade |
| Ningbo Homelink vs. Shenzhen Clou Electronics | Ningbo Homelink vs. YiDong Electronics Technology | Ningbo Homelink vs. Zhonghang Electronic Measuring | Ningbo Homelink vs. Fuzhou Rockchip Electronics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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