Correlation Between Ningbo Fangzheng and Ningbo MedicalSystem
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Ningbo Fangzheng and Ningbo MedicalSystem 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 Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Ningbo MedicalSystem.
Diversification Opportunities for Ningbo Fangzheng and Ningbo MedicalSystem
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Ningbo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem 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 Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Ningbo MedicalSystem
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to generate 1.65 times more return on investment than Ningbo MedicalSystem. However, Ningbo Fangzheng is 1.65 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about -0.21 of its potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about -0.41 per unit of risk. If you would invest 1,768 in Ningbo Fangzheng Automobile on October 11, 2024 and sell it today you would lose (221.00) from holding Ningbo Fangzheng Automobile or give up 12.5% 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. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Ningbo MedicalSystem |
Ningbo Fangzheng and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Ningbo MedicalSystem
The main advantage of trading using opposite Ningbo Fangzheng and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Ningbo MedicalSystem 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 MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.| Ningbo Fangzheng vs. Fujian Longzhou Transportation | Ningbo Fangzheng vs. Hunan TV Broadcast | Ningbo Fangzheng vs. Guangzhou Zhujiang Brewery | Ningbo Fangzheng vs. Heilongjiang Transport Development |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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