Correlation Between Ningbo Fangzheng and Namchow Food
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Namchow Food Group, you can compare the effects of market volatilities on Ningbo Fangzheng and Namchow Food 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 Namchow Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Namchow Food.
Diversification Opportunities for Ningbo Fangzheng and Namchow Food
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Namchow is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Namchow Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namchow Food Group 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 Namchow Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namchow Food Group has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Namchow Food go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Namchow Food
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Namchow Food. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Fangzheng Automobile is 1.07 times less risky than Namchow Food. The stock trades about -0.11 of its potential returns per unit of risk. The Namchow Food Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,745 in Namchow Food Group on October 22, 2024 and sell it today you would earn a total of 30.00 from holding Namchow Food Group or generate 1.72% 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. Namchow Food Group
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Namchow Food Group |
Ningbo Fangzheng and Namchow Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Namchow Food
The main advantage of trading using opposite Ningbo Fangzheng and Namchow Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Namchow Food 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 Namchow Food will offset losses from the drop in Namchow Food's long position.| Ningbo Fangzheng vs. Meinian Onehealth Healthcare | Ningbo Fangzheng vs. Western Metal Materials | Ningbo Fangzheng vs. Anhui Transport Consulting | Ningbo Fangzheng vs. Rising Nonferrous Metals |
| Namchow Food vs. Sichuan Fulin Transportation | Namchow Food vs. Xinjiang Baodi Mining | Namchow Food vs. China Sports Industry | Namchow Food vs. Anhui Tongguan Copper |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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