Correlation Between Guangdong TianYiMa and Ningbo Ligong
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By analyzing existing cross correlation between Guangdong TianYiMa Information and Ningbo Ligong Online, you can compare the effects of market volatilities on Guangdong TianYiMa and Ningbo Ligong 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 Guangdong TianYiMa with a short position of Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong TianYiMa and Ningbo Ligong.
Diversification Opportunities for Guangdong TianYiMa and Ningbo Ligong
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Ningbo is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong TianYiMa Information and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online and Guangdong TianYiMa 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 Guangdong TianYiMa Information are associated (or correlated) with Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Guangdong TianYiMa i.e., Guangdong TianYiMa and Ningbo Ligong go up and down completely randomly.
Pair Corralation between Guangdong TianYiMa and Ningbo Ligong
Assuming the 90 days trading horizon Guangdong TianYiMa Information is expected to generate 0.86 times more return on investment than Ningbo Ligong. However, Guangdong TianYiMa Information is 1.16 times less risky than Ningbo Ligong. It trades about 0.29 of its potential returns per unit of risk. Ningbo Ligong Online is currently generating about 0.22 per unit of risk. If you would invest 2,594 in Guangdong TianYiMa Information on November 8, 2024 and sell it today you would earn a total of 301.00 from holding Guangdong TianYiMa Information or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong TianYiMa Information vs. Ningbo Ligong Online
Performance |
| Timeline |
| Guangdong TianYiMa |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ningbo Ligong Online |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangdong TianYiMa and Ningbo Ligong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong TianYiMa and Ningbo Ligong
The main advantage of trading using opposite Guangdong TianYiMa and Ningbo Ligong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong TianYiMa position performs unexpectedly, Ningbo Ligong 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 Ligong will offset losses from the drop in Ningbo Ligong's long position.The idea behind Guangdong TianYiMa Information and Ningbo Ligong Online 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.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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