Correlation Between Ningxia Building and Guangdong Transtek
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By analyzing existing cross correlation between Ningxia Building Materials and Guangdong Transtek Medical, you can compare the effects of market volatilities on Ningxia Building and Guangdong Transtek 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 Guangdong Transtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Building and Guangdong Transtek.
Diversification Opportunities for Ningxia Building and Guangdong Transtek
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningxia and Guangdong is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Building Materials and Guangdong Transtek Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Transtek 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 Guangdong Transtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Transtek has no effect on the direction of Ningxia Building i.e., Ningxia Building and Guangdong Transtek go up and down completely randomly.
Pair Corralation between Ningxia Building and Guangdong Transtek
Assuming the 90 days trading horizon Ningxia Building is expected to generate 1.96 times less return on investment than Guangdong Transtek. But when comparing it to its historical volatility, Ningxia Building Materials is 1.21 times less risky than Guangdong Transtek. It trades about 0.02 of its potential returns per unit of risk. Guangdong Transtek Medical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 972.00 in Guangdong Transtek Medical on October 27, 2024 and sell it today you would earn a total of 329.00 from holding Guangdong Transtek Medical or generate 33.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Building Materials vs. Guangdong Transtek Medical
Performance |
| Timeline |
| Ningxia Building Mat |
| Guangdong Transtek |
Ningxia Building and Guangdong Transtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Building and Guangdong Transtek
The main advantage of trading using opposite Ningxia Building and Guangdong Transtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Building position performs unexpectedly, Guangdong Transtek 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 Guangdong Transtek will offset losses from the drop in Guangdong Transtek's long position.| Ningxia Building vs. Zijin Mining Group | Ningxia Building vs. Wanhua Chemical Group | Ningxia Building vs. Baoshan Iron Steel | Ningxia Building vs. Shandong Gold Mining |
| Guangdong Transtek vs. Agricultural Bank of | Guangdong Transtek vs. Industrial and Commercial | Guangdong Transtek vs. Bank of China | Guangdong Transtek vs. China Construction Bank |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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