Correlation Between Ningbo Fangzheng and Shenwu Energy
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Shenwu Energy Saving, you can compare the effects of market volatilities on Ningbo Fangzheng and Shenwu Energy 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 Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Shenwu Energy.
Diversification Opportunities for Ningbo Fangzheng and Shenwu Energy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Shenwu is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving 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 Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Shenwu Energy go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Shenwu Energy
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to generate 1.29 times more return on investment than Shenwu Energy. However, Ningbo Fangzheng is 1.29 times more volatile than Shenwu Energy Saving. It trades about 0.01 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about -0.14 per unit of risk. If you would invest 1,551 in Ningbo Fangzheng Automobile on August 28, 2024 and sell it today you would lose (7.00) from holding Ningbo Fangzheng Automobile or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Shenwu Energy Saving
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Shenwu Energy Saving |
Ningbo Fangzheng and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Shenwu Energy
The main advantage of trading using opposite Ningbo Fangzheng and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| Ningbo Fangzheng vs. Loongson Technology Corp | Ningbo Fangzheng vs. Chongqing Road Bridge | Ningbo Fangzheng vs. Shenzhen Fortune Trend | Ningbo Fangzheng vs. Wuhan Xianglong Power |
| Shenwu Energy vs. China Petroleum Chemical | Shenwu Energy vs. PetroChina Co Ltd | Shenwu Energy vs. China State Construction | Shenwu Energy vs. China Railway Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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