Correlation Between Hangzhou Weiguang and Ningbo Jianan
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By analyzing existing cross correlation between Hangzhou Weiguang Electronic and Ningbo Jianan Electronics, you can compare the effects of market volatilities on Hangzhou Weiguang and Ningbo Jianan 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 Hangzhou Weiguang with a short position of Ningbo Jianan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Weiguang and Ningbo Jianan.
Diversification Opportunities for Hangzhou Weiguang and Ningbo Jianan
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hangzhou and Ningbo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Weiguang Electronic and Ningbo Jianan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jianan Electronics and Hangzhou Weiguang 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 Hangzhou Weiguang Electronic are associated (or correlated) with Ningbo Jianan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jianan Electronics has no effect on the direction of Hangzhou Weiguang i.e., Hangzhou Weiguang and Ningbo Jianan go up and down completely randomly.
Pair Corralation between Hangzhou Weiguang and Ningbo Jianan
Assuming the 90 days trading horizon Hangzhou Weiguang is expected to generate 1.46 times less return on investment than Ningbo Jianan. But when comparing it to its historical volatility, Hangzhou Weiguang Electronic is 1.46 times less risky than Ningbo Jianan. It trades about 0.05 of its potential returns per unit of risk. Ningbo Jianan Electronics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,845 in Ningbo Jianan Electronics on September 12, 2024 and sell it today you would earn a total of 666.00 from holding Ningbo Jianan Electronics or generate 36.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Weiguang Electronic vs. Ningbo Jianan Electronics
Performance |
| Timeline |
| Hangzhou Weiguang |
| Ningbo Jianan Electronics |
Hangzhou Weiguang and Ningbo Jianan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Weiguang and Ningbo Jianan
The main advantage of trading using opposite Hangzhou Weiguang and Ningbo Jianan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Weiguang position performs unexpectedly, Ningbo Jianan 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 Jianan will offset losses from the drop in Ningbo Jianan's long position.| Hangzhou Weiguang vs. Agricultural Bank of | Hangzhou Weiguang vs. Industrial and Commercial | Hangzhou Weiguang vs. Bank of China | Hangzhou Weiguang vs. PetroChina Co Ltd |
| Ningbo Jianan vs. Gansu Jiu Steel | Ningbo Jianan vs. Shandong Mining Machinery | Ningbo Jianan vs. Aba Chemicals Corp | Ningbo Jianan vs. BlueFocus Communication Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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