Correlation Between Ningxia Building and Guangzhou Zhujiang
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By analyzing existing cross correlation between Ningxia Building Materials and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on Ningxia Building and Guangzhou Zhujiang 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 Ningxia Building with a short position of Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Building and Guangzhou Zhujiang.
Diversification Opportunities for Ningxia Building and Guangzhou Zhujiang
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ningxia and Guangzhou is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Building Materials and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang and Ningxia Building 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 Ningxia Building Materials are associated (or correlated) with Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of Ningxia Building i.e., Ningxia Building and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between Ningxia Building and Guangzhou Zhujiang
Assuming the 90 days trading horizon Ningxia Building Materials is expected to generate 1.86 times more return on investment than Guangzhou Zhujiang. However, Ningxia Building is 1.86 times more volatile than Guangzhou Zhujiang Brewery. It trades about -0.16 of its potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about -0.31 per unit of risk. If you would invest 1,457 in Ningxia Building Materials on November 3, 2024 and sell it today you would lose (97.00) from holding Ningxia Building Materials or give up 6.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Building Materials vs. Guangzhou Zhujiang Brewery
Performance |
| Timeline |
| Ningxia Building Mat |
| Guangzhou Zhujiang |
Ningxia Building and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Building and Guangzhou Zhujiang
The main advantage of trading using opposite Ningxia Building and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Building position performs unexpectedly, Guangzhou Zhujiang 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 Guangzhou Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.| Ningxia Building vs. Allied Machinery Co | Ningxia Building vs. Huasi Agricultural Development | Ningxia Building vs. Ningxia Younglight Chemicals | Ningxia Building vs. Lutian Machinery Co |
| Guangzhou Zhujiang vs. Dongfeng Automobile Co | Guangzhou Zhujiang vs. Fibocom Wireless | Guangzhou Zhujiang vs. Quectel Wireless Solutions | Guangzhou Zhujiang vs. Wintao Communications Co |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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