Correlation Between Guangdong Shenglu and Ningbo Construction
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Ningbo Construction Co, you can compare the effects of market volatilities on Guangdong Shenglu and Ningbo Construction 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 Guangdong Shenglu with a short position of Ningbo Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Ningbo Construction.
Diversification Opportunities for Guangdong Shenglu and Ningbo Construction
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Ningbo is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction and Guangdong Shenglu 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 Guangdong Shenglu Telecommunication are associated (or correlated) with Ningbo Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Ningbo Construction go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Ningbo Construction
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Ningbo Construction. In addition to that, Guangdong Shenglu is 1.19 times more volatile than Ningbo Construction Co. It trades about 0.0 of its total potential returns per unit of risk. Ningbo Construction Co is currently generating about 0.03 per unit of volatility. If you would invest 416.00 in Ningbo Construction Co on September 14, 2024 and sell it today you would earn a total of 82.00 from holding Ningbo Construction Co or generate 19.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Ningbo Construction Co
Performance |
| Timeline |
| Guangdong Shenglu |
| Ningbo Construction |
Guangdong Shenglu and Ningbo Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Ningbo Construction
The main advantage of trading using opposite Guangdong Shenglu and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Ningbo Construction 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 Construction will offset losses from the drop in Ningbo Construction's long position.| Guangdong Shenglu vs. China Railway Materials | Guangdong Shenglu vs. Xinke Material | Guangdong Shenglu vs. Orinko Advanced Plastics | Guangdong Shenglu vs. Chongqing Sulian Plastic |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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