Correlation Between Hunan Mendale and Ningbo Ligong
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By analyzing existing cross correlation between Hunan Mendale Hometextile and Ningbo Ligong Online, you can compare the effects of market volatilities on Hunan Mendale and Ningbo Ligong 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 Hunan Mendale with a short position of Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Mendale and Ningbo Ligong.
Diversification Opportunities for Hunan Mendale and Ningbo Ligong
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hunan and Ningbo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Mendale Hometextile and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online and Hunan Mendale 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 Hunan Mendale Hometextile are associated (or correlated) with Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Hunan Mendale i.e., Hunan Mendale and Ningbo Ligong go up and down completely randomly.
Pair Corralation between Hunan Mendale and Ningbo Ligong
Assuming the 90 days trading horizon Hunan Mendale Hometextile is expected to generate 1.67 times more return on investment than Ningbo Ligong. However, Hunan Mendale is 1.67 times more volatile than Ningbo Ligong Online. It trades about 0.32 of its potential returns per unit of risk. Ningbo Ligong Online is currently generating about -0.11 per unit of risk. If you would invest 279.00 in Hunan Mendale Hometextile on September 14, 2024 and sell it today you would earn a total of 62.00 from holding Hunan Mendale Hometextile or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Mendale Hometextile vs. Ningbo Ligong Online
Performance |
| Timeline |
| Hunan Mendale Hometextile |
| Ningbo Ligong Online |
Hunan Mendale and Ningbo Ligong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Mendale and Ningbo Ligong
The main advantage of trading using opposite Hunan Mendale and Ningbo Ligong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Mendale position performs unexpectedly, Ningbo Ligong 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 Ningbo Ligong will offset losses from the drop in Ningbo Ligong's long position.| Hunan Mendale vs. Nanjing Putian Telecommunications | Hunan Mendale vs. Tianjin Realty Development | Hunan Mendale vs. Kangyue Technology Co | Hunan Mendale vs. Shenzhen Hifuture Electric |
| Ningbo Ligong vs. China Petroleum Chemical | Ningbo Ligong vs. PetroChina Co Ltd | Ningbo Ligong vs. China State Construction | Ningbo Ligong vs. China Railway Group |
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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