Correlation Between Ningbo Ligong and Shandong Longquan
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By analyzing existing cross correlation between Ningbo Ligong Online and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Ningbo Ligong and Shandong Longquan 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 Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Ligong and Shandong Longquan.
Diversification Opportunities for Ningbo Ligong and Shandong Longquan
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ningbo and Shandong is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Ligong Online and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan 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 Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Ningbo Ligong i.e., Ningbo Ligong and Shandong Longquan go up and down completely randomly.
Pair Corralation between Ningbo Ligong and Shandong Longquan
Assuming the 90 days trading horizon Ningbo Ligong Online is expected to generate 0.84 times more return on investment than Shandong Longquan. However, Ningbo Ligong Online is 1.19 times less risky than Shandong Longquan. It trades about 0.05 of its potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about 0.02 per unit of risk. If you would invest 1,003 in Ningbo Ligong Online on September 4, 2024 and sell it today you would earn a total of 331.00 from holding Ningbo Ligong Online or generate 33.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Ligong Online vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Ningbo Ligong Online |
| Shandong Longquan |
Ningbo Ligong and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Ligong and Shandong Longquan
The main advantage of trading using opposite Ningbo Ligong and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Ligong position performs unexpectedly, Shandong Longquan 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 Shandong Longquan will offset losses from the drop in Shandong Longquan's long position.| Ningbo Ligong vs. Cofoe Medical Technology | Ningbo Ligong vs. Hengkang Medical Group | Ningbo Ligong vs. Nanjing Medlander Medical | Ningbo Ligong vs. Nancal Energy Saving Tech |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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