Correlation Between Ningbo Ligong and Zhongshan Public
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By analyzing existing cross correlation between Ningbo Ligong Online and Zhongshan Public Utilities, you can compare the effects of market volatilities on Ningbo Ligong and Zhongshan Public 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 Ligong with a short position of Zhongshan Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Ligong and Zhongshan Public.
Diversification Opportunities for Ningbo Ligong and Zhongshan Public
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Zhongshan is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Ligong Online and Zhongshan Public Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Public Uti and Ningbo Ligong 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 Ligong Online are associated (or correlated) with Zhongshan Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Public Uti has no effect on the direction of Ningbo Ligong i.e., Ningbo Ligong and Zhongshan Public go up and down completely randomly.
Pair Corralation between Ningbo Ligong and Zhongshan Public
Assuming the 90 days trading horizon Ningbo Ligong Online is expected to generate 1.98 times more return on investment than Zhongshan Public. However, Ningbo Ligong is 1.98 times more volatile than Zhongshan Public Utilities. It trades about 0.35 of its potential returns per unit of risk. Zhongshan Public Utilities is currently generating about 0.05 per unit of risk. If you would invest 1,301 in Ningbo Ligong Online on November 27, 2024 and sell it today you would earn a total of 118.00 from holding Ningbo Ligong Online or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Ligong Online vs. Zhongshan Public Utilities
Performance |
| Timeline |
| Ningbo Ligong Online |
| Zhongshan Public Uti |
Ningbo Ligong and Zhongshan Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Ligong and Zhongshan Public
The main advantage of trading using opposite Ningbo Ligong and Zhongshan Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Ligong position performs unexpectedly, Zhongshan Public 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 Zhongshan Public will offset losses from the drop in Zhongshan Public's long position.| Ningbo Ligong vs. Ningbo Kangqiang Electronics | Ningbo Ligong vs. Jiangxi Naipu Mining | Ningbo Ligong vs. Jinhui Mining Co | Ningbo Ligong vs. Chengtun Mining Group |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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