Correlation Between Ningbo Tech and Jinlong Machinery
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By analyzing existing cross correlation between Ningbo Tech Bank Co and Jinlong Machinery Electronic, you can compare the effects of market volatilities on Ningbo Tech and Jinlong Machinery 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 Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tech and Jinlong Machinery.
Diversification Opportunities for Ningbo Tech and Jinlong Machinery
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Jinlong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tech Bank Co and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery 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 Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of Ningbo Tech i.e., Ningbo Tech and Jinlong Machinery go up and down completely randomly.
Pair Corralation between Ningbo Tech and Jinlong Machinery
Assuming the 90 days trading horizon Ningbo Tech is expected to generate 1.32 times less return on investment than Jinlong Machinery. But when comparing it to its historical volatility, Ningbo Tech Bank Co is 2.01 times less risky than Jinlong Machinery. It trades about 0.11 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 324.00 in Jinlong Machinery Electronic on October 26, 2024 and sell it today you would earn a total of 108.00 from holding Jinlong Machinery Electronic or generate 33.33% 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. Jinlong Machinery Electronic
Performance |
| Timeline |
| Ningbo Tech Bank |
| Jinlong Machinery |
Ningbo Tech and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tech and Jinlong Machinery
The main advantage of trading using opposite Ningbo Tech and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tech position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| Ningbo Tech vs. Industrial and Commercial | Ningbo Tech vs. Kweichow Moutai Co | Ningbo Tech vs. Agricultural Bank of | Ningbo Tech vs. China Mobile Limited |
| Jinlong Machinery vs. China State Construction | Jinlong Machinery vs. Poly Real Estate | Jinlong Machinery vs. China Vanke Co | Jinlong Machinery vs. China Merchants Shekou |
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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