Correlation Between Guangzhou Zhujiang and Ningbo Tech
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Ningbo Tech Bank Co, you can compare the effects of market volatilities on Guangzhou Zhujiang and Ningbo Tech 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 Guangzhou Zhujiang with a short position of Ningbo Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Ningbo Tech.
Diversification Opportunities for Guangzhou Zhujiang and Ningbo Tech
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Ningbo is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Ningbo Tech Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tech Bank and Guangzhou Zhujiang 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 Guangzhou Zhujiang Brewery are associated (or correlated) with Ningbo Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tech Bank has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Ningbo Tech go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Ningbo Tech
Assuming the 90 days trading horizon Guangzhou Zhujiang is expected to generate 2.25 times less return on investment than Ningbo Tech. But when comparing it to its historical volatility, Guangzhou Zhujiang Brewery is 1.75 times less risky than Ningbo Tech. It trades about 0.07 of its potential returns per unit of risk. Ningbo Tech Bank Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Ningbo Tech Bank Co on September 5, 2024 and sell it today you would earn a total of 16.00 from holding Ningbo Tech Bank Co or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Ningbo Tech Bank Co
Performance |
| Timeline |
| Guangzhou Zhujiang |
| Ningbo Tech Bank |
Guangzhou Zhujiang and Ningbo Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Ningbo Tech
The main advantage of trading using opposite Guangzhou Zhujiang and Ningbo Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Ningbo Tech 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 Tech will offset losses from the drop in Ningbo Tech's long position.| Guangzhou Zhujiang vs. Chengdu Kanghua Biological | Guangzhou Zhujiang vs. Beijing Wantai Biological | Guangzhou Zhujiang vs. Suzhou Novoprotein Scientific | Guangzhou Zhujiang vs. Aluminum Corp of |
| Ningbo Tech vs. Bomin Electronics Co | Ningbo Tech vs. Fuzhou Rockchip Electronics | Ningbo Tech vs. Guangzhou Zhujiang Brewery | Ningbo Tech vs. Leaguer Shenzhen MicroElectronics |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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