Correlation Between Ningbo Ligong and Shenzhen Fortune
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By analyzing existing cross correlation between Ningbo Ligong Online and Shenzhen Fortune Trend, you can compare the effects of market volatilities on Ningbo Ligong and Shenzhen Fortune 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 Shenzhen Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Ligong and Shenzhen Fortune.
Diversification Opportunities for Ningbo Ligong and Shenzhen Fortune
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ningbo and Shenzhen is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Ligong Online and Shenzhen Fortune Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Fortune Trend 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 Shenzhen Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Fortune Trend has no effect on the direction of Ningbo Ligong i.e., Ningbo Ligong and Shenzhen Fortune go up and down completely randomly.
Pair Corralation between Ningbo Ligong and Shenzhen Fortune
Assuming the 90 days trading horizon Ningbo Ligong Online is expected to under-perform the Shenzhen Fortune. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Ligong Online is 2.7 times less risky than Shenzhen Fortune. The stock trades about -0.11 of its potential returns per unit of risk. The Shenzhen Fortune Trend is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 18,036 in Shenzhen Fortune Trend on September 13, 2024 and sell it today you would earn a total of 898.00 from holding Shenzhen Fortune Trend or generate 4.98% 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. Shenzhen Fortune Trend
Performance |
| Timeline |
| Ningbo Ligong Online |
| Shenzhen Fortune Trend |
Ningbo Ligong and Shenzhen Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Ligong and Shenzhen Fortune
The main advantage of trading using opposite Ningbo Ligong and Shenzhen Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Ligong position performs unexpectedly, Shenzhen Fortune 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 Shenzhen Fortune will offset losses from the drop in Shenzhen Fortune's long position.| Ningbo Ligong vs. China Petroleum Chemical | Ningbo Ligong vs. PetroChina Co Ltd | Ningbo Ligong vs. China State Construction | Ningbo Ligong vs. China Railway Group |
| Shenzhen Fortune vs. AUPU Home Style | Shenzhen Fortune vs. New Hope Dairy | Shenzhen Fortune vs. Xinjiang Tianrun Dairy | Shenzhen Fortune vs. Anji Foodstuff Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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