Correlation Between Ningbo Fangzheng and Hubei Yingtong
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Hubei Yingtong Telecommunication, you can compare the effects of market volatilities on Ningbo Fangzheng and Hubei Yingtong 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 Hubei Yingtong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Hubei Yingtong.
Diversification Opportunities for Ningbo Fangzheng and Hubei Yingtong
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Hubei is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Hubei Yingtong Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Yingtong Telec 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 Hubei Yingtong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Yingtong Telec has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Hubei Yingtong go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Hubei Yingtong
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Hubei Yingtong. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Fangzheng Automobile is 1.3 times less risky than Hubei Yingtong. The stock trades about -0.01 of its potential returns per unit of risk. The Hubei Yingtong Telecommunication is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,077 in Hubei Yingtong Telecommunication on September 4, 2024 and sell it today you would earn a total of 136.00 from holding Hubei Yingtong Telecommunication or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Hubei Yingtong Telecommunicati
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Hubei Yingtong Telec |
Ningbo Fangzheng and Hubei Yingtong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Hubei Yingtong
The main advantage of trading using opposite Ningbo Fangzheng and Hubei Yingtong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Hubei Yingtong 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 Hubei Yingtong will offset losses from the drop in Hubei Yingtong's long position.| Ningbo Fangzheng vs. Great Sun Foods Co | Ningbo Fangzheng vs. Heilongjiang Transport Development | Ningbo Fangzheng vs. Youyou Foods Co | Ningbo Fangzheng vs. Anji Foodstuff Co |
| Hubei Yingtong vs. Industrial and Commercial | Hubei Yingtong vs. China Construction Bank | Hubei Yingtong vs. Bank of China | Hubei Yingtong vs. Agricultural Bank of |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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