Correlation Between Guangzhou Haige and Ningbo Thermal
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By analyzing existing cross correlation between Guangzhou Haige Communications and Ningbo Thermal Power, you can compare the effects of market volatilities on Guangzhou Haige and Ningbo Thermal 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 Haige with a short position of Ningbo Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Ningbo Thermal.
Diversification Opportunities for Guangzhou Haige and Ningbo Thermal
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Ningbo is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Ningbo Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Thermal Power and Guangzhou Haige 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 Haige Communications are associated (or correlated) with Ningbo Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Thermal Power has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Ningbo Thermal go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Ningbo Thermal
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to generate 1.79 times more return on investment than Ningbo Thermal. However, Guangzhou Haige is 1.79 times more volatile than Ningbo Thermal Power. It trades about 0.23 of its potential returns per unit of risk. Ningbo Thermal Power is currently generating about 0.21 per unit of risk. If you would invest 832.00 in Guangzhou Haige Communications on September 12, 2024 and sell it today you would earn a total of 441.00 from holding Guangzhou Haige Communications or generate 53.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Haige Communications vs. Ningbo Thermal Power
Performance |
| Timeline |
| Guangzhou Haige Comm |
| Ningbo Thermal Power |
Guangzhou Haige and Ningbo Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Ningbo Thermal
The main advantage of trading using opposite Guangzhou Haige and Ningbo Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Ningbo Thermal 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 Thermal will offset losses from the drop in Ningbo Thermal's long position.| Guangzhou Haige vs. Industrial and Commercial | Guangzhou Haige vs. China Construction Bank | Guangzhou Haige vs. Bank of China | Guangzhou Haige vs. Agricultural Bank of |
| Ningbo Thermal vs. Bank of China | Ningbo Thermal vs. Kweichow Moutai Co | Ningbo Thermal vs. PetroChina Co Ltd | Ningbo Thermal vs. Bank of Communications |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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