Correlation Between Ningbo Fangzheng and Hangzhou Guotai
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Hangzhou Guotai Environmental, you can compare the effects of market volatilities on Ningbo Fangzheng and Hangzhou Guotai 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 Hangzhou Guotai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Hangzhou Guotai.
Diversification Opportunities for Ningbo Fangzheng and Hangzhou Guotai
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ningbo and Hangzhou is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Hangzhou Guotai Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Guotai Envi 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 Hangzhou Guotai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Guotai Envi has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Hangzhou Guotai go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Hangzhou Guotai
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Hangzhou Guotai. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Fangzheng Automobile is 1.08 times less risky than Hangzhou Guotai. The stock trades about -0.03 of its potential returns per unit of risk. The Hangzhou Guotai Environmental is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,590 in Hangzhou Guotai Environmental on October 30, 2024 and sell it today you would lose (420.00) from holding Hangzhou Guotai Environmental or give up 11.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.89% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Hangzhou Guotai Environmental
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Hangzhou Guotai Envi |
Ningbo Fangzheng and Hangzhou Guotai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Hangzhou Guotai
The main advantage of trading using opposite Ningbo Fangzheng and Hangzhou Guotai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Hangzhou Guotai 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 Hangzhou Guotai will offset losses from the drop in Hangzhou Guotai's long position.| Ningbo Fangzheng vs. Kweichow Moutai Co | Ningbo Fangzheng vs. Jiangsu Pacific Quartz | Ningbo Fangzheng vs. Shenzhen Transsion Holdings | Ningbo Fangzheng vs. Beijing Roborock Technology |
| Hangzhou Guotai vs. Industrial and Commercial | Hangzhou Guotai vs. Agricultural Bank of | Hangzhou Guotai vs. China Construction Bank | Hangzhou Guotai vs. Bank of China |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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