Correlation Between Linzhou Heavy and Ningbo MedicalSystem
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By analyzing existing cross correlation between Linzhou Heavy Machinery and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Linzhou Heavy and Ningbo MedicalSystem 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 Linzhou Heavy with a short position of Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linzhou Heavy and Ningbo MedicalSystem.
Diversification Opportunities for Linzhou Heavy and Ningbo MedicalSystem
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Linzhou and Ningbo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Linzhou Heavy Machinery and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem and Linzhou Heavy 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 Linzhou Heavy Machinery are associated (or correlated) with Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Linzhou Heavy i.e., Linzhou Heavy and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Linzhou Heavy and Ningbo MedicalSystem
Assuming the 90 days trading horizon Linzhou Heavy Machinery is expected to generate 2.12 times more return on investment than Ningbo MedicalSystem. However, Linzhou Heavy is 2.12 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about 0.02 of its potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about -0.16 per unit of risk. If you would invest 393.00 in Linzhou Heavy Machinery on September 28, 2024 and sell it today you would earn a total of 0.00 from holding Linzhou Heavy Machinery or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linzhou Heavy Machinery vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Linzhou Heavy Machinery |
| Ningbo MedicalSystem |
Linzhou Heavy and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linzhou Heavy and Ningbo MedicalSystem
The main advantage of trading using opposite Linzhou Heavy and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linzhou Heavy position performs unexpectedly, Ningbo MedicalSystem 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 MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.| Linzhou Heavy vs. Bank of China | Linzhou Heavy vs. Kweichow Moutai Co | Linzhou Heavy vs. PetroChina Co Ltd | Linzhou Heavy vs. Bank of Communications |
| Ningbo MedicalSystem vs. Industrial and Commercial | Ningbo MedicalSystem vs. Agricultural Bank of | Ningbo MedicalSystem vs. China Construction Bank | Ningbo MedicalSystem vs. Bank of China |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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