Correlation Between Ningbo Ligong and Penghua Shenzhen
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By analyzing existing cross correlation between Ningbo Ligong Online and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Ningbo Ligong and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Ligong and Penghua Shenzhen.
Diversification Opportunities for Ningbo Ligong and Penghua Shenzhen
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ningbo and Penghua is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Ligong Online and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Ningbo Ligong i.e., Ningbo Ligong and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Ningbo Ligong and Penghua Shenzhen
Assuming the 90 days trading horizon Ningbo Ligong Online is expected to under-perform the Penghua Shenzhen. In addition to that, Ningbo Ligong is 3.38 times more volatile than Penghua Shenzhen Energy. It trades about -0.12 of its total potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.23 per unit of volatility. If you would invest 585.00 in Penghua Shenzhen Energy on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Penghua Shenzhen Energy or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ningbo Ligong Online vs. Penghua Shenzhen Energy
Performance |
| Timeline |
| Ningbo Ligong Online |
| Penghua Shenzhen Energy |
Ningbo Ligong and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Ligong and Penghua Shenzhen
The main advantage of trading using opposite Ningbo Ligong and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Ligong position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen's long position.| Ningbo Ligong vs. Ping An Insurance | Ningbo Ligong vs. Jiangsu Financial Leasing | Ningbo Ligong vs. Servyou Software Group | Ningbo Ligong vs. Qilu Bank Co |
| Penghua Shenzhen vs. Ningbo Ligong Online | Penghua Shenzhen vs. Duzhe Publishing Media | Penghua Shenzhen vs. Chinese Universe Publishing | Penghua Shenzhen vs. Sportsoul Co Ltd |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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