Correlation Between Zhonghang Electronic and Ningbo Homelink
Specify exactly 2 symbols:
By analyzing existing cross correlation between Zhonghang Electronic Measuring and Ningbo Homelink Eco iTech, you can compare the effects of market volatilities on Zhonghang Electronic and Ningbo Homelink 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 Zhonghang Electronic with a short position of Ningbo Homelink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhonghang Electronic and Ningbo Homelink.
Diversification Opportunities for Zhonghang Electronic and Ningbo Homelink
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhonghang and Ningbo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zhonghang Electronic Measuring and Ningbo Homelink Eco iTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Homelink Eco and Zhonghang Electronic 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 Zhonghang Electronic Measuring are associated (or correlated) with Ningbo Homelink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Homelink Eco has no effect on the direction of Zhonghang Electronic i.e., Zhonghang Electronic and Ningbo Homelink go up and down completely randomly.
Pair Corralation between Zhonghang Electronic and Ningbo Homelink
Assuming the 90 days trading horizon Zhonghang Electronic Measuring is expected to generate 1.54 times more return on investment than Ningbo Homelink. However, Zhonghang Electronic is 1.54 times more volatile than Ningbo Homelink Eco iTech. It trades about 0.08 of its potential returns per unit of risk. Ningbo Homelink Eco iTech is currently generating about -0.01 per unit of risk. If you would invest 3,997 in Zhonghang Electronic Measuring on November 7, 2024 and sell it today you would earn a total of 2,603 from holding Zhonghang Electronic Measuring or generate 65.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhonghang Electronic Measuring vs. Ningbo Homelink Eco iTech
Performance |
| Timeline |
| Zhonghang Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ningbo Homelink Eco |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Zhonghang Electronic and Ningbo Homelink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhonghang Electronic and Ningbo Homelink
The main advantage of trading using opposite Zhonghang Electronic and Ningbo Homelink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhonghang Electronic position performs unexpectedly, Ningbo Homelink 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 Homelink will offset losses from the drop in Ningbo Homelink's long position.The idea behind Zhonghang Electronic Measuring and Ningbo Homelink Eco iTech 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |