Correlation Between Ningbo Fangzheng and Guangdong Xiongsu
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Guangdong Xiongsu Technology, you can compare the effects of market volatilities on Ningbo Fangzheng and Guangdong Xiongsu 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 Guangdong Xiongsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Guangdong Xiongsu.
Diversification Opportunities for Ningbo Fangzheng and Guangdong Xiongsu
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ningbo and Guangdong is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Guangdong Xiongsu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Xiongsu 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 Guangdong Xiongsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Xiongsu has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Guangdong Xiongsu go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Guangdong Xiongsu
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Guangdong Xiongsu. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Fangzheng Automobile is 1.99 times less risky than Guangdong Xiongsu. The stock trades about -0.28 of its potential returns per unit of risk. The Guangdong Xiongsu Technology is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 784.00 in Guangdong Xiongsu Technology on October 12, 2024 and sell it today you would lose (104.00) from holding Guangdong Xiongsu Technology or give up 13.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Guangdong Xiongsu Technology
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Guangdong Xiongsu |
Ningbo Fangzheng and Guangdong Xiongsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Guangdong Xiongsu
The main advantage of trading using opposite Ningbo Fangzheng and Guangdong Xiongsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Guangdong Xiongsu 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 Guangdong Xiongsu will offset losses from the drop in Guangdong Xiongsu's long position.| Ningbo Fangzheng vs. GRG Banking Equipment | Ningbo Fangzheng vs. State Grid InformationCommunication | Ningbo Fangzheng vs. Jiangsu Financial Leasing | Ningbo Fangzheng vs. Wuhan Yangtze Communication |
| Guangdong Xiongsu vs. Songz Automobile Air | Guangdong Xiongsu vs. Fujian Longzhou Transportation | Guangdong Xiongsu vs. Sunwave Communications Co | Guangdong Xiongsu vs. Sichuan Fulin Transportation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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