Correlation Between Hua Xia and Ningbo Tech
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By analyzing existing cross correlation between Hua Xia Bank and Ningbo Tech Bank Co, you can compare the effects of market volatilities on Hua Xia and Ningbo Tech 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 Hua Xia with a short position of Ningbo Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Xia and Ningbo Tech.
Diversification Opportunities for Hua Xia and Ningbo Tech
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hua and Ningbo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hua Xia Bank and Ningbo Tech Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tech Bank and Hua Xia 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 Hua Xia Bank are associated (or correlated) with Ningbo Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tech Bank has no effect on the direction of Hua Xia i.e., Hua Xia and Ningbo Tech go up and down completely randomly.
Pair Corralation between Hua Xia and Ningbo Tech
Assuming the 90 days trading horizon Hua Xia Bank is expected to generate 0.5 times more return on investment than Ningbo Tech. However, Hua Xia Bank is 1.99 times less risky than Ningbo Tech. It trades about -0.12 of its potential returns per unit of risk. Ningbo Tech Bank Co is currently generating about -0.17 per unit of risk. If you would invest 778.00 in Hua Xia Bank on October 17, 2024 and sell it today you would lose (25.00) from holding Hua Xia Bank or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Xia Bank vs. Ningbo Tech Bank Co
Performance |
| Timeline |
| Hua Xia Bank |
| Ningbo Tech Bank |
Hua Xia and Ningbo Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Xia and Ningbo Tech
The main advantage of trading using opposite Hua Xia and Ningbo Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Xia position performs unexpectedly, Ningbo Tech 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 Tech will offset losses from the drop in Ningbo Tech's long position.| Hua Xia vs. Guangzhou Haige Communications | Hua Xia vs. Guangxi Wuzhou Communications | Hua Xia vs. Beijing Kingsoft Office | Hua Xia vs. Queclink Wireless Solutions |
| Ningbo Tech vs. YiDong Electronics Technology | Ningbo Tech vs. Nantong Haixing Electronics | Ningbo Tech vs. Winner Medical Co | Ningbo Tech vs. Beijing YanDong MicroElectronic |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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