Correlation Between Anhui Jianghuai and Ningbo Jintian
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Ningbo Jintian Copper, you can compare the effects of market volatilities on Anhui Jianghuai and Ningbo Jintian 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 Jintian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Ningbo Jintian.
Diversification Opportunities for Anhui Jianghuai and Ningbo Jintian
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Ningbo is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Ningbo Jintian Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jintian Copper 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 Jintian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jintian Copper has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and Ningbo Jintian go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Ningbo Jintian
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to generate 1.65 times more return on investment than Ningbo Jintian. However, Anhui Jianghuai is 1.65 times more volatile than Ningbo Jintian Copper. It trades about 0.1 of its potential returns per unit of risk. Ningbo Jintian Copper is currently generating about 0.02 per unit of risk. If you would invest 1,718 in Anhui Jianghuai Automobile on September 12, 2024 and sell it today you would earn a total of 1,935 from holding Anhui Jianghuai Automobile or generate 112.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Jianghuai Automobile vs. Ningbo Jintian Copper
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Ningbo Jintian Copper |
Anhui Jianghuai and Ningbo Jintian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Ningbo Jintian
The main advantage of trading using opposite Anhui Jianghuai and Ningbo Jintian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, Ningbo Jintian 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 Jintian will offset losses from the drop in Ningbo Jintian's long position.| Anhui Jianghuai vs. Lutian Machinery Co | Anhui Jianghuai vs. PetroChina Co Ltd | Anhui Jianghuai vs. Bank of China | Anhui Jianghuai vs. Gansu Jiu Steel |
| Ningbo Jintian vs. Guangzhou Automobile Group | Ningbo Jintian vs. Anhui Jianghuai Automobile | Ningbo Jintian vs. Changchun Faway Automobile | Ningbo Jintian vs. Chengdu Xinzhu RoadBridge |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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