Correlation Between Cofoe Medical and Ningbo Fangzheng
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By analyzing existing cross correlation between Cofoe Medical Technology and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Cofoe Medical and Ningbo Fangzheng 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 Cofoe Medical with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofoe Medical and Ningbo Fangzheng.
Diversification Opportunities for Cofoe Medical and Ningbo Fangzheng
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cofoe and Ningbo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cofoe Medical Technology and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and Cofoe Medical 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 Cofoe Medical Technology are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Cofoe Medical i.e., Cofoe Medical and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Cofoe Medical and Ningbo Fangzheng
Assuming the 90 days trading horizon Cofoe Medical Technology is expected to under-perform the Ningbo Fangzheng. But the stock apears to be less risky and, when comparing its historical volatility, Cofoe Medical Technology is 1.54 times less risky than Ningbo Fangzheng. The stock trades about -0.08 of its potential returns per unit of risk. The Ningbo Fangzheng Automobile is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,656 in Ningbo Fangzheng Automobile on September 13, 2024 and sell it today you would earn a total of 151.00 from holding Ningbo Fangzheng Automobile or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cofoe Medical Technology vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Cofoe Medical Technology |
| Ningbo Fangzheng Aut |
Cofoe Medical and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cofoe Medical and Ningbo Fangzheng
The main advantage of trading using opposite Cofoe Medical and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofoe Medical position performs unexpectedly, Ningbo Fangzheng 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 Ningbo Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Cofoe Medical vs. Zhejiang Qianjiang Motorcycle | Cofoe Medical vs. Ningbo Fangzheng Automobile | Cofoe Medical vs. Great Sun Foods Co | Cofoe Medical vs. New Hope Dairy |
| Ningbo Fangzheng vs. BeiGene | Ningbo Fangzheng vs. Kweichow Moutai Co | Ningbo Fangzheng vs. Beijing Roborock Technology | Ningbo Fangzheng vs. G bits Network Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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