Correlation Between Wintao Communications and Ningbo Jianan
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By analyzing existing cross correlation between Wintao Communications Co and Ningbo Jianan Electronics, you can compare the effects of market volatilities on Wintao Communications and Ningbo Jianan 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 Wintao Communications with a short position of Ningbo Jianan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintao Communications and Ningbo Jianan.
Diversification Opportunities for Wintao Communications and Ningbo Jianan
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wintao and Ningbo is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Wintao Communications Co and Ningbo Jianan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jianan Electronics and Wintao Communications 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 Wintao Communications Co are associated (or correlated) with Ningbo Jianan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jianan Electronics has no effect on the direction of Wintao Communications i.e., Wintao Communications and Ningbo Jianan go up and down completely randomly.
Pair Corralation between Wintao Communications and Ningbo Jianan
Assuming the 90 days trading horizon Wintao Communications Co is expected to under-perform the Ningbo Jianan. But the stock apears to be less risky and, when comparing its historical volatility, Wintao Communications Co is 1.02 times less risky than Ningbo Jianan. The stock trades about -0.01 of its potential returns per unit of risk. The Ningbo Jianan Electronics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,845 in Ningbo Jianan Electronics on September 12, 2024 and sell it today you would earn a total of 666.00 from holding Ningbo Jianan Electronics or generate 36.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintao Communications Co vs. Ningbo Jianan Electronics
Performance |
| Timeline |
| Wintao Communications |
| Ningbo Jianan Electronics |
Wintao Communications and Ningbo Jianan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintao Communications and Ningbo Jianan
The main advantage of trading using opposite Wintao Communications and Ningbo Jianan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintao Communications position performs unexpectedly, Ningbo Jianan 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 Jianan will offset losses from the drop in Ningbo Jianan's long position.The idea behind Wintao Communications Co and Ningbo Jianan Electronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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