Correlation Between Ningbo Homelink and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Ningbo Homelink Eco iTech and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Ningbo Homelink and Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Homelink and Beijing HuaYuanYiTong.
Diversification Opportunities for Ningbo Homelink and Beijing HuaYuanYiTong
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Beijing is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Homelink Eco iTech and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Ningbo Homelink i.e., Ningbo Homelink and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Ningbo Homelink and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Ningbo Homelink Eco iTech is expected to under-perform the Beijing HuaYuanYiTong. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Homelink Eco iTech is 1.22 times less risky than Beijing HuaYuanYiTong. The stock trades about -0.01 of its potential returns per unit of risk. The Beijing HuaYuanYiTong Thermal is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 859.00 in Beijing HuaYuanYiTong Thermal on September 26, 2024 and sell it today you would earn a total of 193.00 from holding Beijing HuaYuanYiTong Thermal or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Homelink Eco iTech vs. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Ningbo Homelink Eco |
| Beijing HuaYuanYiTong |
Ningbo Homelink and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Homelink and Beijing HuaYuanYiTong
The main advantage of trading using opposite Ningbo Homelink and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Homelink position performs unexpectedly, Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.| Ningbo Homelink vs. Zijin Mining Group | Ningbo Homelink vs. Baoshan Iron Steel | Ningbo Homelink vs. Shandong Gold Mining | Ningbo Homelink vs. Rongsheng Petrochemical Co |
| Beijing HuaYuanYiTong vs. Ningbo Homelink Eco iTech | Beijing HuaYuanYiTong vs. UE Furniture Co | Beijing HuaYuanYiTong vs. Anhui Gujing Distillery | Beijing HuaYuanYiTong vs. Lootom Telcovideo Network |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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