Correlation Between State Grid and Ningxia Building
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By analyzing existing cross correlation between State Grid InformationCommunication and Ningxia Building Materials, you can compare the effects of market volatilities on State Grid and Ningxia Building 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 State Grid with a short position of Ningxia Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Ningxia Building.
Diversification Opportunities for State Grid and Ningxia Building
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Ningxia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Ningxia Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Building Mat and State Grid 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 State Grid InformationCommunication are associated (or correlated) with Ningxia Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Building Mat has no effect on the direction of State Grid i.e., State Grid and Ningxia Building go up and down completely randomly.
Pair Corralation between State Grid and Ningxia Building
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to under-perform the Ningxia Building. But the stock apears to be less risky and, when comparing its historical volatility, State Grid InformationCommunication is 1.91 times less risky than Ningxia Building. The stock trades about -0.46 of its potential returns per unit of risk. The Ningxia Building Materials is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 1,462 in Ningxia Building Materials on October 14, 2024 and sell it today you would lose (172.00) from holding Ningxia Building Materials or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Ningxia Building Materials
Performance |
| Timeline |
| State Grid Informati |
| Ningxia Building Mat |
State Grid and Ningxia Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Ningxia Building
The main advantage of trading using opposite State Grid and Ningxia Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Ningxia Building 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 Ningxia Building will offset losses from the drop in Ningxia Building's long position.| State Grid vs. Shenyang Chemical Industry | State Grid vs. Huasi Agricultural Development | State Grid vs. Dosilicon Co | State Grid vs. Sinomach General Machinery |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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