Correlation Between Guangdong Jingyi and Ningbo Construction
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Ningbo Construction Co, you can compare the effects of market volatilities on Guangdong Jingyi and Ningbo Construction 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 Guangdong Jingyi with a short position of Ningbo Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Ningbo Construction.
Diversification Opportunities for Guangdong Jingyi and Ningbo Construction
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Ningbo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction and Guangdong Jingyi 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 Guangdong Jingyi Metal are associated (or correlated) with Ningbo Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Ningbo Construction go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Ningbo Construction
Assuming the 90 days trading horizon Guangdong Jingyi is expected to generate 1.31 times less return on investment than Ningbo Construction. But when comparing it to its historical volatility, Guangdong Jingyi Metal is 1.48 times less risky than Ningbo Construction. It trades about 0.27 of its potential returns per unit of risk. Ningbo Construction Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 408.00 in Ningbo Construction Co on August 25, 2024 and sell it today you would earn a total of 91.00 from holding Ningbo Construction Co or generate 22.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Ningbo Construction Co
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Ningbo Construction |
Guangdong Jingyi and Ningbo Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Ningbo Construction
The main advantage of trading using opposite Guangdong Jingyi and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Ningbo Construction 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 Construction will offset losses from the drop in Ningbo Construction's long position.| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Rongsheng Petrochemical Co |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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