Correlation Between Zhejiang Dahua and Ningbo Tech
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By analyzing existing cross correlation between Zhejiang Dahua Technology and Ningbo Tech Bank Co, you can compare the effects of market volatilities on Zhejiang Dahua and Ningbo Tech 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 Zhejiang Dahua with a short position of Ningbo Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Dahua and Ningbo Tech.
Diversification Opportunities for Zhejiang Dahua and Ningbo Tech
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Ningbo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Dahua Technology and Ningbo Tech Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tech Bank and Zhejiang Dahua 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 Zhejiang Dahua Technology are associated (or correlated) with Ningbo Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tech Bank has no effect on the direction of Zhejiang Dahua i.e., Zhejiang Dahua and Ningbo Tech go up and down completely randomly.
Pair Corralation between Zhejiang Dahua and Ningbo Tech
Assuming the 90 days trading horizon Zhejiang Dahua Technology is expected to generate 1.17 times more return on investment than Ningbo Tech. However, Zhejiang Dahua is 1.17 times more volatile than Ningbo Tech Bank Co. It trades about 0.05 of its potential returns per unit of risk. Ningbo Tech Bank Co is currently generating about -0.04 per unit of risk. If you would invest 1,102 in Zhejiang Dahua Technology on September 12, 2024 and sell it today you would earn a total of 601.00 from holding Zhejiang Dahua Technology or generate 54.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Dahua Technology vs. Ningbo Tech Bank Co
Performance |
| Timeline |
| Zhejiang Dahua Technology |
| Ningbo Tech Bank |
Zhejiang Dahua and Ningbo Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Dahua and Ningbo Tech
The main advantage of trading using opposite Zhejiang Dahua and Ningbo Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Dahua position performs unexpectedly, Ningbo Tech 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 Tech will offset losses from the drop in Ningbo Tech's long position.| Zhejiang Dahua vs. Guangdong Wens Foodstuff | Zhejiang Dahua vs. Beijing Mainstreets Investment | Zhejiang Dahua vs. Shenzhen Topway Video | Zhejiang Dahua vs. Youyou Foods Co |
| Ningbo Tech vs. China Petroleum Chemical | Ningbo Tech vs. PetroChina Co Ltd | Ningbo Tech vs. China State Construction | Ningbo Tech vs. China Railway Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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