Correlation Between Sichuan Yahua and Ningbo Kangqiang
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By analyzing existing cross correlation between Sichuan Yahua Industrial and Ningbo Kangqiang Electronics, you can compare the effects of market volatilities on Sichuan Yahua and Ningbo Kangqiang 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 Sichuan Yahua with a short position of Ningbo Kangqiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Yahua and Ningbo Kangqiang.
Diversification Opportunities for Sichuan Yahua and Ningbo Kangqiang
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sichuan and Ningbo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Yahua Industrial and Ningbo Kangqiang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Kangqiang Ele and Sichuan Yahua 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 Sichuan Yahua Industrial are associated (or correlated) with Ningbo Kangqiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Kangqiang Ele has no effect on the direction of Sichuan Yahua i.e., Sichuan Yahua and Ningbo Kangqiang go up and down completely randomly.
Pair Corralation between Sichuan Yahua and Ningbo Kangqiang
Assuming the 90 days trading horizon Sichuan Yahua Industrial is expected to generate 0.61 times more return on investment than Ningbo Kangqiang. However, Sichuan Yahua Industrial is 1.65 times less risky than Ningbo Kangqiang. It trades about 0.32 of its potential returns per unit of risk. Ningbo Kangqiang Electronics is currently generating about 0.1 per unit of risk. If you would invest 1,135 in Sichuan Yahua Industrial on November 5, 2024 and sell it today you would earn a total of 181.00 from holding Sichuan Yahua Industrial or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Yahua Industrial vs. Ningbo Kangqiang Electronics
Performance |
| Timeline |
| Sichuan Yahua Industrial |
| Ningbo Kangqiang Ele |
Sichuan Yahua and Ningbo Kangqiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Yahua and Ningbo Kangqiang
The main advantage of trading using opposite Sichuan Yahua and Ningbo Kangqiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Yahua position performs unexpectedly, Ningbo Kangqiang 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 Kangqiang will offset losses from the drop in Ningbo Kangqiang's long position.| Sichuan Yahua vs. Goodwill E Health | Sichuan Yahua vs. Huatian Hotel Group | Sichuan Yahua vs. Jiangsu Financial Leasing | Sichuan Yahua vs. Xiamen Bank Co |
| Ningbo Kangqiang vs. Nanjing Putian Telecommunications | Ningbo Kangqiang vs. Cloud Live Technology | Ningbo Kangqiang vs. Shenzhen Coship Electronics | Ningbo Kangqiang vs. Shenzhen Hifuture Electric |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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