Correlation Between Ningbo Ligong and Sinosteel Luonai
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By analyzing existing cross correlation between Ningbo Ligong Online and Sinosteel Luonai Materials, you can compare the effects of market volatilities on Ningbo Ligong and Sinosteel Luonai 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 Sinosteel Luonai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Ligong and Sinosteel Luonai.
Diversification Opportunities for Ningbo Ligong and Sinosteel Luonai
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Sinosteel is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Ligong Online and Sinosteel Luonai Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosteel Luonai Mat 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 Sinosteel Luonai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosteel Luonai Mat has no effect on the direction of Ningbo Ligong i.e., Ningbo Ligong and Sinosteel Luonai go up and down completely randomly.
Pair Corralation between Ningbo Ligong and Sinosteel Luonai
Assuming the 90 days trading horizon Ningbo Ligong Online is expected to generate 2.25 times more return on investment than Sinosteel Luonai. However, Ningbo Ligong is 2.25 times more volatile than Sinosteel Luonai Materials. It trades about 0.2 of its potential returns per unit of risk. Sinosteel Luonai Materials is currently generating about 0.1 per unit of risk. If you would invest 1,194 in Ningbo Ligong Online on November 6, 2024 and sell it today you would earn a total of 107.00 from holding Ningbo Ligong Online or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Ligong Online vs. Sinosteel Luonai Materials
Performance |
| Timeline |
| Ningbo Ligong Online |
| Sinosteel Luonai Mat |
Ningbo Ligong and Sinosteel Luonai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Ligong and Sinosteel Luonai
The main advantage of trading using opposite Ningbo Ligong and Sinosteel Luonai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Ligong position performs unexpectedly, Sinosteel Luonai 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 Sinosteel Luonai will offset losses from the drop in Sinosteel Luonai's long position.| Ningbo Ligong vs. Sublime China Information | Ningbo Ligong vs. Hygon Information Technology | Ningbo Ligong vs. Digital China Information | Ningbo Ligong vs. Sharetronic Data Technology |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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