Correlation Between Zhejiang Juhua and Ningbo Boway
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By analyzing existing cross correlation between Zhejiang Juhua Co and Ningbo Boway Alloy, you can compare the effects of market volatilities on Zhejiang Juhua and Ningbo Boway 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 Zhejiang Juhua with a short position of Ningbo Boway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Ningbo Boway.
Diversification Opportunities for Zhejiang Juhua and Ningbo Boway
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Ningbo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua Co and Ningbo Boway Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Boway Alloy and Zhejiang Juhua 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 Zhejiang Juhua Co are associated (or correlated) with Ningbo Boway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Boway Alloy has no effect on the direction of Zhejiang Juhua i.e., Zhejiang Juhua and Ningbo Boway go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Ningbo Boway
Assuming the 90 days trading horizon Zhejiang Juhua Co is expected to generate 1.36 times more return on investment than Ningbo Boway. However, Zhejiang Juhua is 1.36 times more volatile than Ningbo Boway Alloy. It trades about 0.29 of its potential returns per unit of risk. Ningbo Boway Alloy is currently generating about 0.11 per unit of risk. If you would invest 2,101 in Zhejiang Juhua Co on September 27, 2024 and sell it today you would earn a total of 308.00 from holding Zhejiang Juhua Co or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Juhua Co vs. Ningbo Boway Alloy
Performance |
| Timeline |
| Zhejiang Juhua |
| Ningbo Boway Alloy |
Zhejiang Juhua and Ningbo Boway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Juhua and Ningbo Boway
The main advantage of trading using opposite Zhejiang Juhua and Ningbo Boway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua position performs unexpectedly, Ningbo Boway 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 Boway will offset losses from the drop in Ningbo Boway's long position.| Zhejiang Juhua vs. Zijin Mining Group | Zhejiang Juhua vs. Wanhua Chemical Group | Zhejiang Juhua vs. Baoshan Iron Steel | Zhejiang Juhua vs. Shandong Gold Mining |
| Ningbo Boway vs. Zijin Mining Group | Ningbo Boway vs. Wanhua Chemical Group | Ningbo Boway vs. Baoshan Iron Steel | Ningbo Boway vs. Shandong Gold Mining |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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