Correlation Between Weihai Honglin and Ningbo Jianan
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By analyzing existing cross correlation between Weihai Honglin Electronic and Ningbo Jianan Electronics, you can compare the effects of market volatilities on Weihai Honglin 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 Weihai Honglin with a short position of Ningbo Jianan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weihai Honglin and Ningbo Jianan.
Diversification Opportunities for Weihai Honglin and Ningbo Jianan
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Weihai and Ningbo is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Weihai Honglin Electronic 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 Weihai Honglin 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 Weihai Honglin Electronic 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 Weihai Honglin i.e., Weihai Honglin and Ningbo Jianan go up and down completely randomly.
Pair Corralation between Weihai Honglin and Ningbo Jianan
Assuming the 90 days trading horizon Weihai Honglin is expected to generate 2.85 times less return on investment than Ningbo Jianan. But when comparing it to its historical volatility, Weihai Honglin Electronic is 1.27 times less risky than Ningbo Jianan. It trades about 0.03 of its potential returns per unit of risk. Ningbo Jianan Electronics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,538 in Ningbo Jianan Electronics on August 25, 2024 and sell it today you would earn a total of 712.00 from holding Ningbo Jianan Electronics or generate 46.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weihai Honglin Electronic vs. Ningbo Jianan Electronics
Performance |
| Timeline |
| Weihai Honglin Electronic |
| Ningbo Jianan Electronics |
Weihai Honglin and Ningbo Jianan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weihai Honglin and Ningbo Jianan
The main advantage of trading using opposite Weihai Honglin and Ningbo Jianan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weihai Honglin 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.| Weihai Honglin vs. Kweichow Moutai Co | Weihai Honglin vs. Shenzhen Mindray Bio Medical | Weihai Honglin vs. Jiangsu Pacific Quartz | Weihai Honglin vs. G bits Network Technology |
| Ningbo Jianan vs. CSSC Offshore Marine | Ningbo Jianan vs. Shanghai Yaoji Playing | Ningbo Jianan vs. Chongqing Brewery Co | Ningbo Jianan vs. Pengxin International 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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