Correlation Between China Great and Ningbo Boway
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By analyzing existing cross correlation between China Great Wall and Ningbo Boway Alloy, you can compare the effects of market volatilities on China Great and Ningbo Boway 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 China Great with a short position of Ningbo Boway. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Great and Ningbo Boway.
Diversification Opportunities for China Great and Ningbo Boway
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Ningbo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding China Great Wall and Ningbo Boway Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Boway Alloy and China Great 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 China Great Wall are associated (or correlated) with Ningbo Boway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Boway Alloy has no effect on the direction of China Great i.e., China Great and Ningbo Boway go up and down completely randomly.
Pair Corralation between China Great and Ningbo Boway
Assuming the 90 days trading horizon China Great Wall is expected to under-perform the Ningbo Boway. But the stock apears to be less risky and, when comparing its historical volatility, China Great Wall is 3.02 times less risky than Ningbo Boway. The stock trades about -0.01 of its potential returns per unit of risk. The Ningbo Boway Alloy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,764 in Ningbo Boway Alloy on October 15, 2024 and sell it today you would earn a total of 124.00 from holding Ningbo Boway Alloy or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.75% |
| Values | Daily Returns |
China Great Wall vs. Ningbo Boway Alloy
Performance |
| Timeline |
| China Great Wall |
| Ningbo Boway Alloy |
China Great and Ningbo Boway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Great and Ningbo Boway
The main advantage of trading using opposite China Great and Ningbo Boway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Great position performs unexpectedly, Ningbo Boway 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 Boway will offset losses from the drop in Ningbo Boway's long position.| China Great vs. Agricultural Bank of | China Great vs. Industrial and Commercial | China Great vs. Bank of China | China Great vs. PetroChina Co Ltd |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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