Correlation Between Ningbo Fangzheng and Road Environment
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Road Environment Technology, you can compare the effects of market volatilities on Ningbo Fangzheng and Road Environment 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 Road Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Road Environment.
Diversification Opportunities for Ningbo Fangzheng and Road Environment
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Road is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Road Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Road Environment Tec 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 Road Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Road Environment Tec has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Road Environment go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Road Environment
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to generate 1.23 times more return on investment than Road Environment. However, Ningbo Fangzheng is 1.23 times more volatile than Road Environment Technology. It trades about 0.12 of its potential returns per unit of risk. Road Environment Technology is currently generating about 0.02 per unit of risk. If you would invest 1,500 in Ningbo Fangzheng Automobile on September 1, 2024 and sell it today you would earn a total of 123.00 from holding Ningbo Fangzheng Automobile or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Road Environment Technology
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Road Environment Tec |
Ningbo Fangzheng and Road Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Road Environment
The main advantage of trading using opposite Ningbo Fangzheng and Road Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Road Environment 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 Road Environment will offset losses from the drop in Road Environment's long position.| Ningbo Fangzheng vs. Hangzhou Prevail Optoelectronic | Ningbo Fangzheng vs. Xizi Clean Energy | Ningbo Fangzheng vs. AVIC Fund Management | Ningbo Fangzheng vs. Harvest Fund Management |
| Road Environment vs. Lutian Machinery Co | Road Environment vs. China Longyuan Power | Road Environment vs. PetroChina Co Ltd | Road Environment 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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