Correlation Between Zhejiang Huatong and Ningbo Tip
Specify exactly 2 symbols:
By analyzing existing cross correlation between Zhejiang Huatong Meat and Ningbo Tip Rubber, you can compare the effects of market volatilities on Zhejiang Huatong and Ningbo Tip 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 Zhejiang Huatong with a short position of Ningbo Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Huatong and Ningbo Tip.
Diversification Opportunities for Zhejiang Huatong and Ningbo Tip
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Ningbo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Huatong Meat and Ningbo Tip Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tip Rubber and Zhejiang Huatong 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 Zhejiang Huatong Meat are associated (or correlated) with Ningbo Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tip Rubber has no effect on the direction of Zhejiang Huatong i.e., Zhejiang Huatong and Ningbo Tip go up and down completely randomly.
Pair Corralation between Zhejiang Huatong and Ningbo Tip
Assuming the 90 days trading horizon Zhejiang Huatong is expected to generate 3.05 times less return on investment than Ningbo Tip. But when comparing it to its historical volatility, Zhejiang Huatong Meat is 1.02 times less risky than Ningbo Tip. It trades about 0.1 of its potential returns per unit of risk. Ningbo Tip Rubber is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,180 in Ningbo Tip Rubber on November 7, 2024 and sell it today you would earn a total of 126.00 from holding Ningbo Tip Rubber or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Huatong Meat vs. Ningbo Tip Rubber
Performance |
| Timeline |
| Zhejiang Huatong Meat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ningbo Tip Rubber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zhejiang Huatong and Ningbo Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Huatong and Ningbo Tip
The main advantage of trading using opposite Zhejiang Huatong and Ningbo Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Huatong position performs unexpectedly, Ningbo Tip 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 Tip will offset losses from the drop in Ningbo Tip's long position.The idea behind Zhejiang Huatong Meat and Ningbo Tip Rubber pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |