Correlation Between Ningbo Fangzheng and Xiamen Bank
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Xiamen Bank Co, you can compare the effects of market volatilities on Ningbo Fangzheng and Xiamen Bank 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 Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Xiamen Bank.
Diversification Opportunities for Ningbo Fangzheng and Xiamen Bank
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Xiamen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Xiamen Bank go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Xiamen Bank
Assuming the 90 days trading horizon Ningbo Fangzheng is expected to generate 7.19 times less return on investment than Xiamen Bank. In addition to that, Ningbo Fangzheng is 1.97 times more volatile than Xiamen Bank Co. It trades about 0.01 of its total potential returns per unit of risk. Xiamen Bank Co is currently generating about 0.16 per unit of volatility. If you would invest 520.00 in Xiamen Bank Co on August 28, 2024 and sell it today you would earn a total of 32.00 from holding Xiamen Bank Co or generate 6.15% 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. Xiamen Bank Co
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Xiamen Bank |
Ningbo Fangzheng and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Xiamen Bank
The main advantage of trading using opposite Ningbo Fangzheng and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank'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 |
| Xiamen Bank vs. China Nonferrous Metal | Xiamen Bank vs. Pengxin International Mining | Xiamen Bank vs. Guangzhou Haozhi Industrial | Xiamen Bank vs. Miracll Chemicals Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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