Correlation Between Marssenger Kitchenware and Ningbo Fangzheng
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By analyzing existing cross correlation between Marssenger Kitchenware Co and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Marssenger Kitchenware 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 Marssenger Kitchenware with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marssenger Kitchenware and Ningbo Fangzheng.
Diversification Opportunities for Marssenger Kitchenware and Ningbo Fangzheng
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marssenger and Ningbo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Marssenger Kitchenware Co 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 Marssenger Kitchenware 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 Marssenger Kitchenware Co 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 Marssenger Kitchenware i.e., Marssenger Kitchenware and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Marssenger Kitchenware and Ningbo Fangzheng
Assuming the 90 days trading horizon Marssenger Kitchenware Co is expected to generate 1.39 times more return on investment than Ningbo Fangzheng. However, Marssenger Kitchenware is 1.39 times more volatile than Ningbo Fangzheng Automobile. It trades about 0.27 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about 0.29 per unit of risk. If you would invest 1,329 in Marssenger Kitchenware Co on November 28, 2024 and sell it today you would earn a total of 192.00 from holding Marssenger Kitchenware Co or generate 14.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marssenger Kitchenware Co vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Marssenger Kitchenware |
| Ningbo Fangzheng Aut |
Marssenger Kitchenware and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marssenger Kitchenware and Ningbo Fangzheng
The main advantage of trading using opposite Marssenger Kitchenware and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marssenger Kitchenware 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.The idea behind Marssenger Kitchenware Co and Ningbo Fangzheng Automobile 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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