Correlation Between Ningbo Fangzheng and China Merchants
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and China Merchants Bank, you can compare the effects of market volatilities on Ningbo Fangzheng and China Merchants 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 China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and China Merchants.
Diversification Opportunities for Ningbo Fangzheng and China Merchants
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ningbo and China is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank 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 China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and China Merchants go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and China Merchants
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the China Merchants. In addition to that, Ningbo Fangzheng is 2.72 times more volatile than China Merchants Bank. It trades about -0.12 of its total potential returns per unit of risk. China Merchants Bank is currently generating about 0.2 per unit of volatility. If you would invest 3,835 in China Merchants Bank on October 23, 2024 and sell it today you would earn a total of 179.00 from holding China Merchants Bank or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. China Merchants Bank
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| China Merchants Bank |
Ningbo Fangzheng and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and China Merchants
The main advantage of trading using opposite Ningbo Fangzheng and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| Ningbo Fangzheng vs. Zhongyin Babi Food | Ningbo Fangzheng vs. Anji Foodstuff Co | Ningbo Fangzheng vs. Xiwang Foodstuffs Co | Ningbo Fangzheng vs. Guilin Seamild Foods |
| China Merchants vs. Angang Steel Co | China Merchants vs. Guangdong Qunxing Toys | China Merchants vs. Jiangsu Hoperun Software | China Merchants vs. Guangzhou Dongfang Hotel |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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