Correlation Between Ningbo Ligong and China Longyuan
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By analyzing existing cross correlation between Ningbo Ligong Online and China Longyuan Power, you can compare the effects of market volatilities on Ningbo Ligong and China Longyuan 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 China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Ligong and China Longyuan.
Diversification Opportunities for Ningbo Ligong and China Longyuan
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ningbo and China is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Ligong Online and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power 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 China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Ningbo Ligong i.e., Ningbo Ligong and China Longyuan go up and down completely randomly.
Pair Corralation between Ningbo Ligong and China Longyuan
Assuming the 90 days trading horizon Ningbo Ligong Online is expected to under-perform the China Longyuan. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Ligong Online is 1.6 times less risky than China Longyuan. The stock trades about -0.15 of its potential returns per unit of risk. The China Longyuan Power is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,790 in China Longyuan Power on August 28, 2024 and sell it today you would lose (79.00) from holding China Longyuan Power or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Ligong Online vs. China Longyuan Power
Performance |
| Timeline |
| Ningbo Ligong Online |
| China Longyuan Power |
Ningbo Ligong and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Ligong and China Longyuan
The main advantage of trading using opposite Ningbo Ligong and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Ligong position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.| Ningbo Ligong vs. Keli Sensing Technology | Ningbo Ligong vs. Heilongjiang Transport Development | Ningbo Ligong vs. Jinhe Biotechnology Co | Ningbo Ligong vs. Kangping Technology Co |
| China Longyuan vs. Ningbo Ligong Online | China Longyuan vs. Epoxy Base Electronic | China Longyuan vs. Southern PublishingMedia Co | China Longyuan vs. Changjiang Publishing Media |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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