Correlation Between Chongqing Road and Ningbo Tip
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By analyzing existing cross correlation between Chongqing Road Bridge and Ningbo Tip Rubber, you can compare the effects of market volatilities on Chongqing Road and Ningbo Tip 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 Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Ningbo Tip.
Diversification Opportunities for Chongqing Road and Ningbo Tip
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Ningbo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Ningbo Tip Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tip Rubber 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 Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tip Rubber has no effect on the direction of Chongqing Road i.e., Chongqing Road and Ningbo Tip go up and down completely randomly.
Pair Corralation between Chongqing Road and Ningbo Tip
Assuming the 90 days trading horizon Chongqing Road Bridge is expected to generate 1.33 times more return on investment than Ningbo Tip. However, Chongqing Road is 1.33 times more volatile than Ningbo Tip Rubber. It trades about 0.04 of its potential returns per unit of risk. Ningbo Tip Rubber is currently generating about 0.02 per unit of risk. If you would invest 589.00 in Chongqing Road Bridge on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Chongqing Road Bridge or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Road Bridge vs. Ningbo Tip Rubber
Performance |
| Timeline |
| Chongqing Road Bridge |
| Ningbo Tip Rubber |
Chongqing Road and Ningbo Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Ningbo Tip
The main advantage of trading using opposite Chongqing Road and Ningbo Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road position performs unexpectedly, Ningbo Tip 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 Tip will offset losses from the drop in Ningbo Tip's long position.| Chongqing Road vs. Industrial and Commercial | Chongqing Road vs. China Construction Bank | Chongqing Road vs. Agricultural Bank of | Chongqing Road vs. Bank of China |
| Ningbo Tip vs. Loongson Technology Corp | Ningbo Tip vs. Chongqing Road Bridge | Ningbo Tip vs. Shenzhen Fortune Trend | Ningbo Tip 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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