Correlation Between Shandong Sanyuan and Ningbo GQY
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and Ningbo GQY Video, you can compare the effects of market volatilities on Shandong Sanyuan and Ningbo GQY 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 Shandong Sanyuan with a short position of Ningbo GQY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and Ningbo GQY.
Diversification Opportunities for Shandong Sanyuan and Ningbo GQY
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Ningbo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology and Ningbo GQY Video in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo GQY Video and Shandong Sanyuan 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 Shandong Sanyuan Biotechnology are associated (or correlated) with Ningbo GQY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo GQY Video has no effect on the direction of Shandong Sanyuan i.e., Shandong Sanyuan and Ningbo GQY go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and Ningbo GQY
Assuming the 90 days trading horizon Shandong Sanyuan Biotechnology is expected to under-perform the Ningbo GQY. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Sanyuan Biotechnology is 2.72 times less risky than Ningbo GQY. The stock trades about -0.11 of its potential returns per unit of risk. The Ningbo GQY Video is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 619.00 in Ningbo GQY Video on August 28, 2024 and sell it today you would earn a total of 92.00 from holding Ningbo GQY Video or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. Ningbo GQY Video
Performance |
| Timeline |
| Shandong Sanyuan Bio |
| Ningbo GQY Video |
Shandong Sanyuan and Ningbo GQY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and Ningbo GQY
The main advantage of trading using opposite Shandong Sanyuan and Ningbo GQY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan position performs unexpectedly, Ningbo GQY 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 GQY will offset losses from the drop in Ningbo GQY's long position.| Shandong Sanyuan vs. New Hope Dairy | Shandong Sanyuan vs. Shandong Ruifeng Chemical | Shandong Sanyuan vs. Maoming Petro Chemical Shihua | Shandong Sanyuan vs. Yangmei Chemical Co |
| Ningbo GQY vs. Shandong Mining Machinery | Ningbo GQY vs. Fujian Oriental Silver | Ningbo GQY vs. Harbin Air Conditioning | Ningbo GQY vs. Tibet Huayu Mining |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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