Correlation Between Wuhan Yangtze and Ningbo Fangzheng
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Wuhan Yangtze and Ningbo Fangzheng 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 Wuhan Yangtze with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Ningbo Fangzheng.
Diversification Opportunities for Wuhan Yangtze and Ningbo Fangzheng
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuhan and Ningbo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and Wuhan Yangtze 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 Wuhan Yangtze Communication are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Ningbo Fangzheng
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to under-perform the Ningbo Fangzheng. In addition to that, Wuhan Yangtze is 1.13 times more volatile than Ningbo Fangzheng Automobile. It trades about -0.46 of its total potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.28 per unit of volatility. If you would invest 1,807 in Ningbo Fangzheng Automobile on October 12, 2024 and sell it today you would lose (298.00) from holding Ningbo Fangzheng Automobile or give up 16.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Ningbo Fangzheng Aut |
Wuhan Yangtze and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Ningbo Fangzheng
The main advantage of trading using opposite Wuhan Yangtze and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Ningbo Fangzheng 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 Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Wuhan Yangtze vs. Hefei Metalforming Mach | Wuhan Yangtze vs. Hubeiyichang Transportation Group | Wuhan Yangtze vs. Jiaozuo Wanfang Aluminum | Wuhan Yangtze vs. Western Metal Materials |
| Ningbo Fangzheng vs. GRG Banking Equipment | Ningbo Fangzheng vs. State Grid InformationCommunication | Ningbo Fangzheng vs. Jiangsu Financial Leasing | Ningbo Fangzheng vs. Wuhan Yangtze Communication |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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