Correlation Between Zhongshan Broad and Ningbo Ligong
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By analyzing existing cross correlation between Zhongshan Broad Ocean Motor and Ningbo Ligong Online, you can compare the effects of market volatilities on Zhongshan Broad and Ningbo Ligong 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 Zhongshan Broad with a short position of Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Broad and Ningbo Ligong.
Diversification Opportunities for Zhongshan Broad and Ningbo Ligong
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhongshan and Ningbo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Broad Ocean Motor and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online and Zhongshan Broad 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 Zhongshan Broad Ocean Motor are associated (or correlated) with Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Zhongshan Broad i.e., Zhongshan Broad and Ningbo Ligong go up and down completely randomly.
Pair Corralation between Zhongshan Broad and Ningbo Ligong
Assuming the 90 days trading horizon Zhongshan Broad is expected to generate 1.66 times less return on investment than Ningbo Ligong. But when comparing it to its historical volatility, Zhongshan Broad Ocean Motor is 1.38 times less risky than Ningbo Ligong. It trades about 0.04 of its potential returns per unit of risk. Ningbo Ligong Online is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Ningbo Ligong Online on September 19, 2024 and sell it today you would earn a total of 277.00 from holding Ningbo Ligong Online or generate 26.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Broad Ocean Motor vs. Ningbo Ligong Online
Performance |
| Timeline |
| Zhongshan Broad Ocean |
| Ningbo Ligong Online |
Zhongshan Broad and Ningbo Ligong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Broad and Ningbo Ligong
The main advantage of trading using opposite Zhongshan Broad and Ningbo Ligong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Broad position performs unexpectedly, Ningbo Ligong 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 Ligong will offset losses from the drop in Ningbo Ligong's long position.| Zhongshan Broad vs. Cofco Biochemical Anhui | Zhongshan Broad vs. Liuzhou Chemical Industry | Zhongshan Broad vs. Gan Yuan Foods | Zhongshan Broad vs. JuneYao Dairy Co |
| Ningbo Ligong vs. Hainan Haiqi Transportation | Ningbo Ligong vs. Zhongshan Broad Ocean Motor | Ningbo Ligong vs. Jiangsu Broadcasting Cable | Ningbo Ligong vs. Ye Chiu Metal |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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