Correlation Between Ningbo Tech-Bank and Beken Corp
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By analyzing existing cross correlation between Ningbo Tech Bank Co and Beken Corp, you can compare the effects of market volatilities on Ningbo Tech-Bank and Beken Corp 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-Bank with a short position of Beken Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tech-Bank and Beken Corp.
Diversification Opportunities for Ningbo Tech-Bank and Beken Corp
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ningbo and Beken is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tech Bank Co and Beken Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beken Corp and Ningbo Tech-Bank 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 Beken Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beken Corp has no effect on the direction of Ningbo Tech-Bank i.e., Ningbo Tech-Bank and Beken Corp go up and down completely randomly.
Pair Corralation between Ningbo Tech-Bank and Beken Corp
Assuming the 90 days trading horizon Ningbo Tech-Bank is expected to generate 4.1 times less return on investment than Beken Corp. But when comparing it to its historical volatility, Ningbo Tech Bank Co is 2.84 times less risky than Beken Corp. It trades about 0.27 of its potential returns per unit of risk. Beken Corp is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 2,678 in Beken Corp on November 7, 2024 and sell it today you would earn a total of 1,369 from holding Beken Corp or generate 51.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tech Bank Co vs. Beken Corp
Performance |
| Timeline |
| Ningbo Tech Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Beken Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Ningbo Tech-Bank and Beken Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tech-Bank and Beken Corp
The main advantage of trading using opposite Ningbo Tech-Bank and Beken Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tech-Bank position performs unexpectedly, Beken Corp 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 Beken Corp will offset losses from the drop in Beken Corp's long position.The idea behind Ningbo Tech Bank Co and Beken Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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