Correlation Between 159681 and Ningbo Tech
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By analyzing existing cross correlation between 159681 and Ningbo Tech Bank Co, you can compare the effects of market volatilities on 159681 and Ningbo Tech 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 159681 with a short position of Ningbo Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Ningbo Tech.
Diversification Opportunities for 159681 and Ningbo Tech
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 159681 and Ningbo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and Ningbo Tech Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tech Bank and 159681 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 159681 are associated (or correlated) with Ningbo Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tech Bank has no effect on the direction of 159681 i.e., 159681 and Ningbo Tech go up and down completely randomly.
Pair Corralation between 159681 and Ningbo Tech
Assuming the 90 days trading horizon 159681 is expected to generate 1.08 times less return on investment than Ningbo Tech. In addition to that, 159681 is 1.15 times more volatile than Ningbo Tech Bank Co. It trades about 0.06 of its total potential returns per unit of risk. Ningbo Tech Bank Co is currently generating about 0.07 per unit of volatility. If you would invest 257.00 in Ningbo Tech Bank Co on September 3, 2024 and sell it today you would earn a total of 71.00 from holding Ningbo Tech Bank Co or generate 27.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
159681 vs. Ningbo Tech Bank Co
Performance |
| Timeline |
| 159681 |
| Ningbo Tech Bank |
159681 and Ningbo Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159681 and Ningbo Tech
The main advantage of trading using opposite 159681 and Ningbo Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 position performs unexpectedly, Ningbo Tech 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 Tech will offset losses from the drop in Ningbo Tech's long position.The idea behind 159681 and Ningbo Tech Bank Co 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.| Ningbo Tech vs. Beijing Wantai Biological | Ningbo Tech vs. Aluminum Corp of | Ningbo Tech vs. COL Digital Publishing | Ningbo Tech vs. Shaanxi Meineng Clean |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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