Correlation Between Ningbo Homelink and Shenzhen Clou
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By analyzing existing cross correlation between Ningbo Homelink Eco iTech and Shenzhen Clou Electronics, you can compare the effects of market volatilities on Ningbo Homelink and Shenzhen Clou 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 Homelink with a short position of Shenzhen Clou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Homelink and Shenzhen Clou.
Diversification Opportunities for Ningbo Homelink and Shenzhen Clou
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Shenzhen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Homelink Eco iTech and Shenzhen Clou Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Clou Electronics and Ningbo Homelink 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 Homelink Eco iTech are associated (or correlated) with Shenzhen Clou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Clou Electronics has no effect on the direction of Ningbo Homelink i.e., Ningbo Homelink and Shenzhen Clou go up and down completely randomly.
Pair Corralation between Ningbo Homelink and Shenzhen Clou
Assuming the 90 days trading horizon Ningbo Homelink Eco iTech is expected to generate 1.02 times more return on investment than Shenzhen Clou. However, Ningbo Homelink is 1.02 times more volatile than Shenzhen Clou Electronics. It trades about 0.01 of its potential returns per unit of risk. Shenzhen Clou Electronics is currently generating about -0.04 per unit of risk. If you would invest 2,160 in Ningbo Homelink Eco iTech on November 30, 2024 and sell it today you would lose (221.00) from holding Ningbo Homelink Eco iTech or give up 10.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningbo Homelink Eco iTech vs. Shenzhen Clou Electronics
Performance |
Timeline |
Ningbo Homelink Eco |
Shenzhen Clou Electronics |
Ningbo Homelink and Shenzhen Clou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Homelink and Shenzhen Clou
The main advantage of trading using opposite Ningbo Homelink and Shenzhen Clou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Homelink position performs unexpectedly, Shenzhen Clou 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 Shenzhen Clou will offset losses from the drop in Shenzhen Clou's long position.Ningbo Homelink vs. Wangneng Environment Co | ||
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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