Correlation Between Ningbo Fangzheng and Zhejiang Huayou
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Zhejiang Huayou Cobalt, you can compare the effects of market volatilities on Ningbo Fangzheng and Zhejiang Huayou 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 Zhejiang Huayou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Zhejiang Huayou.
Diversification Opportunities for Ningbo Fangzheng and Zhejiang Huayou
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ningbo and Zhejiang is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Zhejiang Huayou Cobalt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Huayou Cobalt 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 Zhejiang Huayou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Huayou Cobalt has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Zhejiang Huayou go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Zhejiang Huayou
Assuming the 90 days trading horizon Ningbo Fangzheng is expected to generate 1.44 times less return on investment than Zhejiang Huayou. In addition to that, Ningbo Fangzheng is 1.23 times more volatile than Zhejiang Huayou Cobalt. It trades about 0.07 of its total potential returns per unit of risk. Zhejiang Huayou Cobalt is currently generating about 0.13 per unit of volatility. If you would invest 2,185 in Zhejiang Huayou Cobalt on October 18, 2024 and sell it today you would earn a total of 760.00 from holding Zhejiang Huayou Cobalt or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Zhejiang Huayou Cobalt
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Zhejiang Huayou Cobalt |
Ningbo Fangzheng and Zhejiang Huayou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Zhejiang Huayou
The main advantage of trading using opposite Ningbo Fangzheng and Zhejiang Huayou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Zhejiang Huayou 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 Zhejiang Huayou will offset losses from the drop in Zhejiang Huayou's long position.| Ningbo Fangzheng vs. Guangdong Marubi Biotechnology | Ningbo Fangzheng vs. Keeson Technology Corp | Ningbo Fangzheng vs. Eyebright Medical Technology | Ningbo Fangzheng vs. Hubei Forbon Technology |
| Zhejiang Huayou vs. HUAQIN TECHNOLOGY LTD | Zhejiang Huayou vs. Ningbo Fangzheng Automobile | Zhejiang Huayou vs. China Mobile Limited | Zhejiang Huayou vs. Tongyu Communication |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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