Correlation Between China Sports and Ningbo MedicalSystem
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By analyzing existing cross correlation between China Sports Industry and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on China Sports and Ningbo MedicalSystem 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 China Sports with a short position of Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Sports and Ningbo MedicalSystem.
Diversification Opportunities for China Sports and Ningbo MedicalSystem
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Ningbo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China Sports Industry and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem and China Sports 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 China Sports Industry are associated (or correlated) with Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of China Sports i.e., China Sports and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between China Sports and Ningbo MedicalSystem
Assuming the 90 days trading horizon China Sports Industry is expected to generate 2.13 times more return on investment than Ningbo MedicalSystem. However, China Sports is 2.13 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about 0.06 of its potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about -0.18 per unit of risk. If you would invest 814.00 in China Sports Industry on September 27, 2024 and sell it today you would earn a total of 28.00 from holding China Sports Industry or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Sports Industry vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| China Sports Industry |
| Ningbo MedicalSystem |
China Sports and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Sports and Ningbo MedicalSystem
The main advantage of trading using opposite China Sports and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Sports position performs unexpectedly, Ningbo MedicalSystem 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 MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.| China Sports vs. PetroChina Co Ltd | China Sports vs. China Mobile Limited | China Sports vs. CNOOC Limited | China Sports vs. Ping An Insurance |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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