Correlation Between Ningbo Fangzheng and Hainan Airlines
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Hainan Airlines Co, you can compare the effects of market volatilities on Ningbo Fangzheng and Hainan Airlines 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 Hainan Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Hainan Airlines.
Diversification Opportunities for Ningbo Fangzheng and Hainan Airlines
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Hainan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Hainan Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Airlines 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 Hainan Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Airlines has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Hainan Airlines go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Hainan Airlines
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to generate 0.77 times more return on investment than Hainan Airlines. However, Ningbo Fangzheng Automobile is 1.29 times less risky than Hainan Airlines. It trades about 0.15 of its potential returns per unit of risk. Hainan Airlines Co is currently generating about 0.06 per unit of risk. If you would invest 1,649 in Ningbo Fangzheng Automobile on September 14, 2024 and sell it today you would earn a total of 148.00 from holding Ningbo Fangzheng Automobile or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Hainan Airlines Co
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Hainan Airlines |
Ningbo Fangzheng and Hainan Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Hainan Airlines
The main advantage of trading using opposite Ningbo Fangzheng and Hainan Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Hainan Airlines 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 Hainan Airlines will offset losses from the drop in Hainan Airlines' long position.| Ningbo Fangzheng vs. BeiGene | Ningbo Fangzheng vs. Kweichow Moutai Co | Ningbo Fangzheng vs. Beijing Roborock Technology | Ningbo Fangzheng vs. G bits Network Technology |
| Hainan Airlines vs. Anhui Jianghuai Automobile | Hainan Airlines vs. Linewell Software Co | Hainan Airlines vs. Ningbo Fangzheng Automobile | Hainan Airlines vs. Jiangsu Xinri E Vehicle |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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