Correlation Between Hangzhou Prevail and Ningbo Fangzheng
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By analyzing existing cross correlation between Hangzhou Prevail Optoelectronic and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Hangzhou Prevail and Ningbo Fangzheng 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 Hangzhou Prevail with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Prevail and Ningbo Fangzheng.
Diversification Opportunities for Hangzhou Prevail and Ningbo Fangzheng
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hangzhou and Ningbo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Prevail Optoelectroni and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and Hangzhou Prevail 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 Hangzhou Prevail Optoelectronic are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Hangzhou Prevail i.e., Hangzhou Prevail and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Hangzhou Prevail and Ningbo Fangzheng
Assuming the 90 days trading horizon Hangzhou Prevail Optoelectronic is expected to under-perform the Ningbo Fangzheng. In addition to that, Hangzhou Prevail is 1.02 times more volatile than Ningbo Fangzheng Automobile. It trades about -0.09 of its total potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about 0.12 per unit of volatility. If you would invest 1,500 in Ningbo Fangzheng Automobile on September 1, 2024 and sell it today you would earn a total of 123.00 from holding Ningbo Fangzheng Automobile or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Prevail Optoelectroni vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Hangzhou Prevail Opt |
| Ningbo Fangzheng Aut |
Hangzhou Prevail and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Prevail and Ningbo Fangzheng
The main advantage of trading using opposite Hangzhou Prevail and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Prevail position performs unexpectedly, Ningbo Fangzheng 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 Ningbo Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Hangzhou Prevail vs. Industrial and Commercial | Hangzhou Prevail vs. Kweichow Moutai Co | Hangzhou Prevail vs. Agricultural Bank of | Hangzhou Prevail vs. China Mobile Limited |
| Ningbo Fangzheng vs. Hangzhou Prevail Optoelectronic | Ningbo Fangzheng vs. Xizi Clean Energy | Ningbo Fangzheng vs. AVIC Fund Management | Ningbo Fangzheng vs. Harvest Fund Management |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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