Correlation Between Ningbo MedicalSystem and Porton Fine
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By analyzing existing cross correlation between Ningbo MedicalSystem Biotechnology and Porton Fine Chemicals, you can compare the effects of market volatilities on Ningbo MedicalSystem and Porton Fine 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 Porton Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo MedicalSystem and Porton Fine.
Diversification Opportunities for Ningbo MedicalSystem and Porton Fine
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Porton is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo MedicalSystem Biotechno and Porton Fine Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porton Fine Chemicals 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 Porton Fine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porton Fine Chemicals has no effect on the direction of Ningbo MedicalSystem i.e., Ningbo MedicalSystem and Porton Fine go up and down completely randomly.
Pair Corralation between Ningbo MedicalSystem and Porton Fine
Assuming the 90 days trading horizon Ningbo MedicalSystem Biotechnology is expected to generate 0.8 times more return on investment than Porton Fine. However, Ningbo MedicalSystem Biotechnology is 1.26 times less risky than Porton Fine. It trades about 0.11 of its potential returns per unit of risk. Porton Fine Chemicals is currently generating about 0.06 per unit of risk. If you would invest 998.00 in Ningbo MedicalSystem Biotechnology on November 5, 2024 and sell it today you would earn a total of 23.00 from holding Ningbo MedicalSystem Biotechnology or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo MedicalSystem Biotechno vs. Porton Fine Chemicals
Performance |
| Timeline |
| Ningbo MedicalSystem |
| Porton Fine Chemicals |
Ningbo MedicalSystem and Porton Fine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo MedicalSystem and Porton Fine
The main advantage of trading using opposite Ningbo MedicalSystem and Porton Fine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo MedicalSystem position performs unexpectedly, Porton Fine 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 Porton Fine will offset losses from the drop in Porton Fine's long position.The idea behind Ningbo MedicalSystem Biotechnology and Porton Fine Chemicals 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.
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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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