Correlation Between Ningbo Fangzheng and Anhui Jianghuai
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Anhui Jianghuai Automobile, you can compare the effects of market volatilities on Ningbo Fangzheng and Anhui Jianghuai 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 Jianghuai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Anhui Jianghuai.
Diversification Opportunities for Ningbo Fangzheng and Anhui Jianghuai
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Anhui is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Anhui Jianghuai Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jianghuai Auto 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 Jianghuai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jianghuai Auto has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Anhui Jianghuai go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Anhui Jianghuai
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Anhui Jianghuai. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Fangzheng Automobile is 1.41 times less risky than Anhui Jianghuai. The stock trades about -0.04 of its potential returns per unit of risk. The Anhui Jianghuai Automobile is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,455 in Anhui Jianghuai Automobile on August 27, 2024 and sell it today you would earn a total of 430.00 from holding Anhui Jianghuai Automobile or generate 12.45% 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. Anhui Jianghuai Automobile
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Anhui Jianghuai Auto |
Ningbo Fangzheng and Anhui Jianghuai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Anhui Jianghuai
The main advantage of trading using opposite Ningbo Fangzheng and Anhui Jianghuai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Anhui Jianghuai 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 Jianghuai will offset losses from the drop in Anhui Jianghuai's long position.| Ningbo Fangzheng vs. Loongson Technology Corp | Ningbo Fangzheng vs. Chongqing Road Bridge | Ningbo Fangzheng vs. Shenzhen Fortune Trend | Ningbo Fangzheng vs. Wuhan Xianglong Power |
| Anhui Jianghuai vs. Lutian Machinery Co | Anhui Jianghuai vs. China Longyuan Power | Anhui Jianghuai vs. Changshu Tongrun Auto | Anhui Jianghuai vs. PetroChina Co Ltd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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