Correlation Between Ningbo Fangzheng and Shaanxi Construction
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Ningbo Fangzheng and Shaanxi Construction 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 Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Shaanxi Construction.
Diversification Opportunities for Ningbo Fangzheng and Shaanxi Construction
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Shaanxi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction 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 Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Shaanxi Construction
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Shaanxi Construction. In addition to that, Ningbo Fangzheng is 1.06 times more volatile than Shaanxi Construction Machinery. It trades about -0.03 of its total potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about 0.1 per unit of volatility. If you would invest 243.00 in Shaanxi Construction Machinery on September 27, 2024 and sell it today you would earn a total of 97.00 from holding Shaanxi Construction Machinery or generate 39.92% 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. Shaanxi Construction Machinery
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Shaanxi Construction |
Ningbo Fangzheng and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Shaanxi Construction
The main advantage of trading using opposite Ningbo Fangzheng and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| Ningbo Fangzheng vs. China Life Insurance | Ningbo Fangzheng vs. Cinda Securities Co | Ningbo Fangzheng vs. Piotech Inc A | Ningbo Fangzheng vs. Dongxing Sec Co |
| Shaanxi Construction vs. Cambricon Technologies Corp | Shaanxi Construction vs. Loongson Technology Corp | Shaanxi Construction vs. Shenzhen Fortune Trend | Shaanxi Construction vs. Chongqing Road Bridge |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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