Correlation Between Anhui Jianghuai and Ningbo Kangqiang
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Ningbo Kangqiang Electronics, you can compare the effects of market volatilities on Anhui Jianghuai and Ningbo Kangqiang 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 Anhui Jianghuai with a short position of Ningbo Kangqiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Ningbo Kangqiang.
Diversification Opportunities for Anhui Jianghuai and Ningbo Kangqiang
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Anhui and Ningbo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Ningbo Kangqiang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Kangqiang Ele and Anhui Jianghuai 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 Anhui Jianghuai Automobile are associated (or correlated) with Ningbo Kangqiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Kangqiang Ele has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and Ningbo Kangqiang go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Ningbo Kangqiang
Assuming the 90 days trading horizon Anhui Jianghuai is expected to generate 1.09 times less return on investment than Ningbo Kangqiang. But when comparing it to its historical volatility, Anhui Jianghuai Automobile is 1.67 times less risky than Ningbo Kangqiang. It trades about 0.09 of its potential returns per unit of risk. Ningbo Kangqiang Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,649 in Ningbo Kangqiang Electronics on October 30, 2024 and sell it today you would earn a total of 64.00 from holding Ningbo Kangqiang Electronics or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Jianghuai Automobile vs. Ningbo Kangqiang Electronics
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Ningbo Kangqiang Ele |
Anhui Jianghuai and Ningbo Kangqiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Ningbo Kangqiang
The main advantage of trading using opposite Anhui Jianghuai and Ningbo Kangqiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, Ningbo Kangqiang 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 Kangqiang will offset losses from the drop in Ningbo Kangqiang's long position.| Anhui Jianghuai vs. China Longyuan Power | Anhui Jianghuai vs. PetroChina Co Ltd | Anhui Jianghuai vs. Guangxi Guiguan Electric | Anhui Jianghuai vs. Yantai North Andre |
| Ningbo Kangqiang vs. Wuxi Xuelang Environmental | Ningbo Kangqiang vs. Baoshan Iron Steel | Ningbo Kangqiang vs. GreenTech Environmental Co | Ningbo Kangqiang vs. CareRay Digital Medical |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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