Correlation Between Ningbo Fangzheng and Allied Machinery
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Allied Machinery Co, you can compare the effects of market volatilities on Ningbo Fangzheng and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Allied Machinery.
Diversification Opportunities for Ningbo Fangzheng and Allied Machinery
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Allied is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Allied Machinery go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Allied Machinery
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Allied Machinery. In addition to that, Ningbo Fangzheng is 1.47 times more volatile than Allied Machinery Co. It trades about -0.03 of its total potential returns per unit of risk. Allied Machinery Co is currently generating about 0.02 per unit of volatility. If you would invest 1,440 in Allied Machinery Co on September 27, 2024 and sell it today you would earn a total of 56.00 from holding Allied Machinery Co or generate 3.89% 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. Allied Machinery Co
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Allied Machinery |
Ningbo Fangzheng and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Allied Machinery
The main advantage of trading using opposite Ningbo Fangzheng and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery'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 |
| Allied Machinery vs. HeBei Jinniu Chemical | Allied Machinery vs. Markor International Home | Allied Machinery vs. Guizhou Chanhen Chemical | Allied Machinery vs. Xilong Chemical 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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