Correlation Between Nanning Chemical and Ningbo Construction
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By analyzing existing cross correlation between Nanning Chemical Industry and Ningbo Construction Co, you can compare the effects of market volatilities on Nanning Chemical and Ningbo Construction 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 Nanning Chemical with a short position of Ningbo Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanning Chemical and Ningbo Construction.
Diversification Opportunities for Nanning Chemical and Ningbo Construction
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nanning and Ningbo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nanning Chemical Industry and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction and Nanning Chemical 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 Nanning Chemical Industry are associated (or correlated) with Ningbo Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Nanning Chemical i.e., Nanning Chemical and Ningbo Construction go up and down completely randomly.
Pair Corralation between Nanning Chemical and Ningbo Construction
Assuming the 90 days trading horizon Nanning Chemical Industry is expected to generate 0.68 times more return on investment than Ningbo Construction. However, Nanning Chemical Industry is 1.47 times less risky than Ningbo Construction. It trades about -0.05 of its potential returns per unit of risk. Ningbo Construction Co is currently generating about -0.12 per unit of risk. If you would invest 1,840 in Nanning Chemical Industry on November 5, 2024 and sell it today you would lose (78.00) from holding Nanning Chemical Industry or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanning Chemical Industry vs. Ningbo Construction Co
Performance |
| Timeline |
| Nanning Chemical Industry |
| Ningbo Construction |
Nanning Chemical and Ningbo Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanning Chemical and Ningbo Construction
The main advantage of trading using opposite Nanning Chemical and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanning Chemical position performs unexpectedly, Ningbo Construction 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 Construction will offset losses from the drop in Ningbo Construction's long position.| Nanning Chemical vs. Sichuan Hebang Biotechnology | Nanning Chemical vs. Guangdong Marubi Biotechnology | Nanning Chemical vs. Iat Automobile Technology | Nanning Chemical vs. Bloomage Biotechnology Corp |
| Ningbo Construction vs. PetroChina Co Ltd | Ningbo Construction vs. China Mobile Limited | Ningbo Construction vs. CNOOC Limited | Ningbo Construction 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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