Correlation Between Chongqing Road and Ningbo Fangzheng
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By analyzing existing cross correlation between Chongqing Road Bridge and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Chongqing Road and Ningbo Fangzheng 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 Chongqing Road with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Ningbo Fangzheng.
Diversification Opportunities for Chongqing Road and Ningbo Fangzheng
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Ningbo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and Chongqing Road 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 Chongqing Road Bridge are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Chongqing Road i.e., Chongqing Road and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Chongqing Road and Ningbo Fangzheng
Assuming the 90 days trading horizon Chongqing Road Bridge is expected to generate 1.07 times more return on investment than Ningbo Fangzheng. However, Chongqing Road is 1.07 times more volatile than Ningbo Fangzheng Automobile. It trades about 0.11 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.09 per unit of risk. If you would invest 624.00 in Chongqing Road Bridge on August 25, 2024 and sell it today you would earn a total of 48.00 from holding Chongqing Road Bridge or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chongqing Road Bridge vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Chongqing Road Bridge |
| Ningbo Fangzheng Aut |
Chongqing Road and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Ningbo Fangzheng
The main advantage of trading using opposite Chongqing Road and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road position performs unexpectedly, Ningbo Fangzheng 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 Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Chongqing Road vs. Guangdong Brandmax Marketing | Chongqing Road vs. GRINM Semiconductor Materials | Chongqing Road vs. Shandong Ruifeng Chemical | Chongqing Road vs. StarPower Semiconductor |
| Ningbo Fangzheng vs. Loongson Technology Corp | Ningbo Fangzheng vs. Chongqing Road Bridge | Ningbo Fangzheng vs. Shenzhen Fortune Trend | Ningbo Fangzheng vs. Wuhan Xianglong Power |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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