Correlation Between Ningbo Fangzheng and Zhuzhou Feilu
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Zhuzhou Feilu High Tech, you can compare the effects of market volatilities on Ningbo Fangzheng and Zhuzhou Feilu 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 Zhuzhou Feilu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Zhuzhou Feilu.
Diversification Opportunities for Ningbo Fangzheng and Zhuzhou Feilu
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Zhuzhou is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Zhuzhou Feilu High Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhuzhou Feilu High 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 Zhuzhou Feilu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhuzhou Feilu High has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Zhuzhou Feilu go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Zhuzhou Feilu
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Zhuzhou Feilu. In addition to that, Ningbo Fangzheng is 1.02 times more volatile than Zhuzhou Feilu High Tech. It trades about -0.01 of its total potential returns per unit of risk. Zhuzhou Feilu High Tech is currently generating about 0.01 per unit of volatility. If you would invest 790.00 in Zhuzhou Feilu High Tech on September 4, 2024 and sell it today you would lose (56.00) from holding Zhuzhou Feilu High Tech or give up 7.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Zhuzhou Feilu High Tech
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Zhuzhou Feilu High |
Ningbo Fangzheng and Zhuzhou Feilu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Zhuzhou Feilu
The main advantage of trading using opposite Ningbo Fangzheng and Zhuzhou Feilu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Zhuzhou Feilu 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 Zhuzhou Feilu will offset losses from the drop in Zhuzhou Feilu'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 |
| Zhuzhou Feilu vs. Holitech Technology Co | Zhuzhou Feilu vs. Meinian Onehealth Healthcare | Zhuzhou Feilu vs. Humanwell Healthcare Group | Zhuzhou Feilu vs. Tianshui Huatian Technology |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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