Correlation Between Anhui Jianghuai and Ningbo Fangzheng
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Anhui Jianghuai 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 Anhui Jianghuai with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Ningbo Fangzheng.
Diversification Opportunities for Anhui Jianghuai and Ningbo Fangzheng
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Ningbo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile 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 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 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 Anhui Jianghuai i.e., Anhui Jianghuai and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Ningbo Fangzheng
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to generate 1.41 times more return on investment than Ningbo Fangzheng. However, Anhui Jianghuai is 1.41 times more volatile than Ningbo Fangzheng Automobile. It trades about 0.14 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.04 per unit of risk. If you would invest 3,455 in Anhui Jianghuai Automobile on August 27, 2024 and sell it today you would earn a total of 430.00 from holding Anhui Jianghuai Automobile or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Jianghuai Automobile vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Ningbo Fangzheng Aut |
Anhui Jianghuai and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Ningbo Fangzheng
The main advantage of trading using opposite Anhui Jianghuai and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai 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.| Anhui Jianghuai vs. Lutian Machinery Co | Anhui Jianghuai vs. China Longyuan Power | Anhui Jianghuai vs. Changshu Tongrun Auto | Anhui Jianghuai vs. PetroChina Co Ltd |
| Ningbo Fangzheng vs. Loongson Technology Corp | Ningbo Fangzheng vs. Chongqing Road Bridge | Ningbo Fangzheng vs. Shenzhen Fortune Trend | Ningbo Fangzheng vs. Wuhan Xianglong Power |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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