Correlation Between Ningbo MedicalSystem and Shenwu Energy
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By analyzing existing cross correlation between Ningbo MedicalSystem Biotechnology and Shenwu Energy Saving, you can compare the effects of market volatilities on Ningbo MedicalSystem and Shenwu Energy 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 Ningbo MedicalSystem with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo MedicalSystem and Shenwu Energy.
Diversification Opportunities for Ningbo MedicalSystem and Shenwu Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Shenwu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo MedicalSystem Biotechno and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving and Ningbo MedicalSystem 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 Ningbo MedicalSystem Biotechnology are associated (or correlated) with Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Ningbo MedicalSystem i.e., Ningbo MedicalSystem and Shenwu Energy go up and down completely randomly.
Pair Corralation between Ningbo MedicalSystem and Shenwu Energy
Assuming the 90 days trading horizon Ningbo MedicalSystem is expected to generate 1.65 times less return on investment than Shenwu Energy. But when comparing it to its historical volatility, Ningbo MedicalSystem Biotechnology is 1.41 times less risky than Shenwu Energy. It trades about 0.04 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Shenwu Energy Saving on September 3, 2024 and sell it today you would earn a total of 61.00 from holding Shenwu Energy Saving or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo MedicalSystem Biotechno vs. Shenwu Energy Saving
Performance |
| Timeline |
| Ningbo MedicalSystem |
| Shenwu Energy Saving |
Ningbo MedicalSystem and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo MedicalSystem and Shenwu Energy
The main advantage of trading using opposite Ningbo MedicalSystem and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo MedicalSystem position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| Ningbo MedicalSystem vs. Chengdu Kanghua Biological | Ningbo MedicalSystem vs. Beijing Wantai Biological | Ningbo MedicalSystem vs. Suzhou Novoprotein Scientific | Ningbo MedicalSystem vs. Aluminum Corp of |
| Shenwu Energy vs. Shanghai Action Education | Shenwu Energy vs. Offcn Education Technology | Shenwu Energy vs. Hubeiyichang Transportation Group | Shenwu Energy vs. Shanghai Broadband Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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