Correlation Between Ningbo Fangzheng and Anhui Huaren
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Anhui Huaren Health, you can compare the effects of market volatilities on Ningbo Fangzheng and Anhui Huaren 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 Anhui Huaren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Anhui Huaren.
Diversification Opportunities for Ningbo Fangzheng and Anhui Huaren
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Anhui is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Anhui Huaren Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaren Health 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 Anhui Huaren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaren Health has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Anhui Huaren go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Anhui Huaren
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Anhui Huaren. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Fangzheng Automobile is 1.11 times less risky than Anhui Huaren. The stock trades about -0.21 of its potential returns per unit of risk. The Anhui Huaren Health is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 1,220 in Anhui Huaren Health on October 11, 2024 and sell it today you would lose (131.00) from holding Anhui Huaren Health or give up 10.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Anhui Huaren Health
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Anhui Huaren Health |
Ningbo Fangzheng and Anhui Huaren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Anhui Huaren
The main advantage of trading using opposite Ningbo Fangzheng and Anhui Huaren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Anhui Huaren 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 Anhui Huaren will offset losses from the drop in Anhui Huaren'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 |
| Anhui Huaren vs. Bomesc Offshore Engineering | Anhui Huaren vs. Ningbo Fangzheng Automobile | Anhui Huaren vs. CSSC Offshore Marine | Anhui Huaren vs. Guangzhou Seagull Kitchen |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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