Correlation Between Ningbo MedicalSystem and Allied Machinery
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By analyzing existing cross correlation between Ningbo MedicalSystem Biotechnology and Allied Machinery Co, you can compare the effects of market volatilities on Ningbo MedicalSystem and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo MedicalSystem and Allied Machinery.
Diversification Opportunities for Ningbo MedicalSystem and Allied Machinery
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Allied is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo MedicalSystem Biotechno and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Ningbo MedicalSystem i.e., Ningbo MedicalSystem and Allied Machinery go up and down completely randomly.
Pair Corralation between Ningbo MedicalSystem and Allied Machinery
Assuming the 90 days trading horizon Ningbo MedicalSystem Biotechnology is expected to under-perform the Allied Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo MedicalSystem Biotechnology is 1.69 times less risky than Allied Machinery. The stock trades about -0.16 of its potential returns per unit of risk. The Allied Machinery Co is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,685 in Allied Machinery Co on September 28, 2024 and sell it today you would lose (98.00) from holding Allied Machinery Co or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo MedicalSystem Biotechno vs. Allied Machinery Co
Performance |
| Timeline |
| Ningbo MedicalSystem |
| Allied Machinery |
Ningbo MedicalSystem and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo MedicalSystem and Allied Machinery
The main advantage of trading using opposite Ningbo MedicalSystem and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo MedicalSystem position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| Ningbo MedicalSystem vs. Industrial and Commercial | Ningbo MedicalSystem vs. Agricultural Bank of | Ningbo MedicalSystem vs. China Construction Bank | Ningbo MedicalSystem vs. Bank of China |
| Allied Machinery vs. Bank of China | Allied Machinery vs. Kweichow Moutai Co | Allied Machinery vs. PetroChina Co Ltd | Allied Machinery vs. Bank of Communications |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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