Correlation Between Ningbo Tech and Shenyang Chemical
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By analyzing existing cross correlation between Ningbo Tech Bank Co and Shenyang Chemical Industry, you can compare the effects of market volatilities on Ningbo Tech and Shenyang Chemical 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 Tech with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tech and Shenyang Chemical.
Diversification Opportunities for Ningbo Tech and Shenyang Chemical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Shenyang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tech Bank Co and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Ningbo Tech 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 Tech Bank Co are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Ningbo Tech i.e., Ningbo Tech and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Ningbo Tech and Shenyang Chemical
Assuming the 90 days trading horizon Ningbo Tech Bank Co is expected to generate 0.91 times more return on investment than Shenyang Chemical. However, Ningbo Tech Bank Co is 1.1 times less risky than Shenyang Chemical. It trades about 0.08 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.15 per unit of risk. If you would invest 283.00 in Ningbo Tech Bank Co on October 22, 2024 and sell it today you would earn a total of 8.00 from holding Ningbo Tech Bank Co or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tech Bank Co vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Ningbo Tech Bank |
| Shenyang Chemical |
Ningbo Tech and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tech and Shenyang Chemical
The main advantage of trading using opposite Ningbo Tech and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tech position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Ningbo Tech vs. Jinhe Biotechnology Co | Ningbo Tech vs. China Mobile Limited | Ningbo Tech vs. Shanghai Rightongene Biotechnology | Ningbo Tech vs. Wuhan Hvsen Biotechnology |
| Shenyang Chemical vs. Fibocom Wireless | Shenyang Chemical vs. Changchun Engley Automobile | Shenyang Chemical vs. Harvest Fund Management | Shenyang Chemical vs. Tongyu Communication |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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