Correlation Between Ningbo Fangzheng and Senci Electric
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Senci Electric Machinery, you can compare the effects of market volatilities on Ningbo Fangzheng and Senci Electric 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 Senci Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Senci Electric.
Diversification Opportunities for Ningbo Fangzheng and Senci Electric
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Senci is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Senci Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senci Electric Machinery 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 Senci Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senci Electric Machinery has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Senci Electric go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Senci Electric
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Senci Electric. In addition to that, Ningbo Fangzheng is 1.54 times more volatile than Senci Electric Machinery. It trades about -0.06 of its total potential returns per unit of risk. Senci Electric Machinery is currently generating about 0.1 per unit of volatility. If you would invest 1,311 in Senci Electric Machinery on September 26, 2024 and sell it today you would earn a total of 422.00 from holding Senci Electric Machinery or generate 32.19% 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. Senci Electric Machinery
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Senci Electric Machinery |
Ningbo Fangzheng and Senci Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Senci Electric
The main advantage of trading using opposite Ningbo Fangzheng and Senci Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Senci Electric 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 Senci Electric will offset losses from the drop in Senci Electric'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 |
| Senci Electric vs. Industrial and Commercial | Senci Electric vs. Agricultural Bank of | Senci Electric vs. China Construction Bank | Senci Electric vs. Bank of China |
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 Stocks Directory module to find actively traded stocks across global markets.
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