Correlation Between Ningbo MedicalSystem and Yunnan Xiyi
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By analyzing existing cross correlation between Ningbo MedicalSystem Biotechnology and Yunnan Xiyi Industrial, you can compare the effects of market volatilities on Ningbo MedicalSystem and Yunnan Xiyi 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 Yunnan Xiyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo MedicalSystem and Yunnan Xiyi.
Diversification Opportunities for Ningbo MedicalSystem and Yunnan Xiyi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Yunnan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo MedicalSystem Biotechno and Yunnan Xiyi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Xiyi Industrial 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 Yunnan Xiyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Xiyi Industrial has no effect on the direction of Ningbo MedicalSystem i.e., Ningbo MedicalSystem and Yunnan Xiyi go up and down completely randomly.
Pair Corralation between Ningbo MedicalSystem and Yunnan Xiyi
Assuming the 90 days trading horizon Ningbo MedicalSystem is expected to generate 1.38 times less return on investment than Yunnan Xiyi. But when comparing it to its historical volatility, Ningbo MedicalSystem Biotechnology is 1.04 times less risky than Yunnan Xiyi. It trades about 0.01 of its potential returns per unit of risk. Yunnan Xiyi Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,118 in Yunnan Xiyi Industrial on September 3, 2024 and sell it today you would earn a total of 21.00 from holding Yunnan Xiyi Industrial or generate 1.88% 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. Yunnan Xiyi Industrial
Performance |
| Timeline |
| Ningbo MedicalSystem |
| Yunnan Xiyi Industrial |
Ningbo MedicalSystem and Yunnan Xiyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo MedicalSystem and Yunnan Xiyi
The main advantage of trading using opposite Ningbo MedicalSystem and Yunnan Xiyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo MedicalSystem position performs unexpectedly, Yunnan Xiyi 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 Yunnan Xiyi will offset losses from the drop in Yunnan Xiyi'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 |
| Yunnan Xiyi vs. Anhui Huilong Agricultural | Yunnan Xiyi vs. Huasi Agricultural Development | Yunnan Xiyi vs. Shantui Construction Machinery | Yunnan Xiyi vs. Sinomach General Machinery |
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.
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