Correlation Between Ningbo MedicalSystem and Shenzhen Bingchuan
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By analyzing existing cross correlation between Ningbo MedicalSystem Biotechnology and Shenzhen Bingchuan Network, you can compare the effects of market volatilities on Ningbo MedicalSystem and Shenzhen Bingchuan 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 Bingchuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo MedicalSystem and Shenzhen Bingchuan.
Diversification Opportunities for Ningbo MedicalSystem and Shenzhen Bingchuan
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Shenzhen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo MedicalSystem Biotechno and Shenzhen Bingchuan Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bingchuan 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 Bingchuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bingchuan has no effect on the direction of Ningbo MedicalSystem i.e., Ningbo MedicalSystem and Shenzhen Bingchuan go up and down completely randomly.
Pair Corralation between Ningbo MedicalSystem and Shenzhen Bingchuan
Assuming the 90 days trading horizon Ningbo MedicalSystem is expected to generate 3.73 times less return on investment than Shenzhen Bingchuan. But when comparing it to its historical volatility, Ningbo MedicalSystem Biotechnology is 1.81 times less risky than Shenzhen Bingchuan. It trades about 0.12 of its potential returns per unit of risk. Shenzhen Bingchuan Network is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,840 in Shenzhen Bingchuan Network on September 1, 2024 and sell it today you would earn a total of 493.00 from holding Shenzhen Bingchuan Network or generate 26.79% 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. Shenzhen Bingchuan Network
Performance |
| Timeline |
| Ningbo MedicalSystem |
| Shenzhen Bingchuan |
Ningbo MedicalSystem and Shenzhen Bingchuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo MedicalSystem and Shenzhen Bingchuan
The main advantage of trading using opposite Ningbo MedicalSystem and Shenzhen Bingchuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo MedicalSystem position performs unexpectedly, Shenzhen Bingchuan 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 Bingchuan will offset losses from the drop in Shenzhen Bingchuan's long position.| Ningbo MedicalSystem vs. PetroChina Co Ltd | Ningbo MedicalSystem vs. China Mobile Limited | Ningbo MedicalSystem vs. CNOOC Limited | Ningbo MedicalSystem vs. Ping An Insurance |
| Shenzhen Bingchuan vs. Shenzhen MYS Environmental | Shenzhen Bingchuan vs. AVIC Fund Management | Shenzhen Bingchuan vs. Penghua Shenzhen Energy | Shenzhen Bingchuan vs. Jizhong Energy Resources |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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