Correlation Between Ningxia Building and Shenzhen Kexin
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By analyzing existing cross correlation between Ningxia Building Materials and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Ningxia Building and Shenzhen Kexin 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 Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Building and Shenzhen Kexin.
Diversification Opportunities for Ningxia Building and Shenzhen Kexin
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Shenzhen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Building Materials and Shenzhen Kexin Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kexin Commu 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 Shenzhen Kexin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kexin Commu has no effect on the direction of Ningxia Building i.e., Ningxia Building and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Ningxia Building and Shenzhen Kexin
Assuming the 90 days trading horizon Ningxia Building Materials is expected to generate 0.87 times more return on investment than Shenzhen Kexin. However, Ningxia Building Materials is 1.15 times less risky than Shenzhen Kexin. It trades about 0.07 of its potential returns per unit of risk. Shenzhen Kexin Communication is currently generating about -0.22 per unit of risk. If you would invest 1,457 in Ningxia Building Materials on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Ningxia Building Materials or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Building Materials vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Ningxia Building Mat |
| Shenzhen Kexin Commu |
Ningxia Building and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Building and Shenzhen Kexin
The main advantage of trading using opposite Ningxia Building and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Building position performs unexpectedly, Shenzhen Kexin 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 Shenzhen Kexin will offset losses from the drop in Shenzhen Kexin's long position.| Ningxia Building vs. Jiangxi Naipu Mining | Ningxia Building vs. Allmed Medical Products | Ningxia Building vs. Minmetals Capital Co | Ningxia Building vs. Cowealth Medical China |
| Shenzhen Kexin vs. Industrial and Commercial | Shenzhen Kexin vs. Kweichow Moutai Co | Shenzhen Kexin vs. Agricultural Bank of | Shenzhen Kexin vs. China Mobile Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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