Correlation Between Ningbo Fangzheng and Haima Automobile
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Haima Automobile Group, you can compare the effects of market volatilities on Ningbo Fangzheng and Haima Automobile 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 Fangzheng with a short position of Haima Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Haima Automobile.
Diversification Opportunities for Ningbo Fangzheng and Haima Automobile
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Haima is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Haima Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haima Automobile and Ningbo Fangzheng 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 Fangzheng Automobile are associated (or correlated) with Haima Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haima Automobile has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Haima Automobile go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Haima Automobile
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Haima Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Fangzheng Automobile is 1.12 times less risky than Haima Automobile. The stock trades about -0.01 of its potential returns per unit of risk. The Haima Automobile Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 523.00 in Haima Automobile Group on September 3, 2024 and sell it today you would lose (73.00) from holding Haima Automobile Group or give up 13.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Haima Automobile Group
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Haima Automobile |
Ningbo Fangzheng and Haima Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Haima Automobile
The main advantage of trading using opposite Ningbo Fangzheng and Haima Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Haima Automobile 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 Haima Automobile will offset losses from the drop in Haima Automobile's long position.| Ningbo Fangzheng vs. PetroChina Co Ltd | Ningbo Fangzheng vs. China Mobile Limited | Ningbo Fangzheng vs. Industrial and Commercial | Ningbo Fangzheng vs. China Life Insurance |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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