Correlation Between Ningbo MedicalSystem and Shenzhen Glory
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By analyzing existing cross correlation between Ningbo MedicalSystem Biotechnology and Shenzhen Glory Medical, you can compare the effects of market volatilities on Ningbo MedicalSystem and Shenzhen Glory 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 Shenzhen Glory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo MedicalSystem and Shenzhen Glory.
Diversification Opportunities for Ningbo MedicalSystem and Shenzhen Glory
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningbo and Shenzhen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo MedicalSystem Biotechno and Shenzhen Glory Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Glory Medical 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 Shenzhen Glory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Glory Medical has no effect on the direction of Ningbo MedicalSystem i.e., Ningbo MedicalSystem and Shenzhen Glory go up and down completely randomly.
Pair Corralation between Ningbo MedicalSystem and Shenzhen Glory
Assuming the 90 days trading horizon Ningbo MedicalSystem is expected to generate 1.07 times less return on investment than Shenzhen Glory. In addition to that, Ningbo MedicalSystem is 1.1 times more volatile than Shenzhen Glory Medical. It trades about 0.03 of its total potential returns per unit of risk. Shenzhen Glory Medical is currently generating about 0.03 per unit of volatility. If you would invest 329.00 in Shenzhen Glory Medical on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Shenzhen Glory Medical or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo MedicalSystem Biotechno vs. Shenzhen Glory Medical
Performance |
| Timeline |
| Ningbo MedicalSystem |
| Shenzhen Glory Medical |
Ningbo MedicalSystem and Shenzhen Glory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo MedicalSystem and Shenzhen Glory
The main advantage of trading using opposite Ningbo MedicalSystem and Shenzhen Glory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo MedicalSystem position performs unexpectedly, Shenzhen Glory 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 Shenzhen Glory will offset losses from the drop in Shenzhen Glory's long position.| Ningbo MedicalSystem vs. Industrial and Commercial | Ningbo MedicalSystem vs. China Construction Bank | Ningbo MedicalSystem vs. Agricultural Bank of | Ningbo MedicalSystem vs. Bank of China |
| Shenzhen Glory vs. PetroChina Co Ltd | Shenzhen Glory vs. China State Construction | Shenzhen Glory vs. China Mobile Limited | Shenzhen Glory vs. Industrial and Commercial |
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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