Correlation Between Ningxia Building and Hua Xia
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By analyzing existing cross correlation between Ningxia Building Materials and Hua Xia Bank, you can compare the effects of market volatilities on Ningxia Building and Hua Xia 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 Hua Xia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Building and Hua Xia.
Diversification Opportunities for Ningxia Building and Hua Xia
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Hua is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Building Materials and Hua Xia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Xia Bank 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 Hua Xia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Xia Bank has no effect on the direction of Ningxia Building i.e., Ningxia Building and Hua Xia go up and down completely randomly.
Pair Corralation between Ningxia Building and Hua Xia
Assuming the 90 days trading horizon Ningxia Building is expected to generate 4.22 times less return on investment than Hua Xia. In addition to that, Ningxia Building is 2.3 times more volatile than Hua Xia Bank. It trades about 0.01 of its total potential returns per unit of risk. Hua Xia Bank is currently generating about 0.07 per unit of volatility. If you would invest 565.00 in Hua Xia Bank on September 4, 2024 and sell it today you would earn a total of 178.00 from holding Hua Xia Bank or generate 31.5% 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. Hua Xia Bank
Performance |
| Timeline |
| Ningxia Building Mat |
| Hua Xia Bank |
Ningxia Building and Hua Xia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Building and Hua Xia
The main advantage of trading using opposite Ningxia Building and Hua Xia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Building position performs unexpectedly, Hua Xia 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 Hua Xia will offset losses from the drop in Hua Xia's long position.| Ningxia Building vs. Guangzhou Zhujiang Brewery | Ningxia Building vs. Dalian Thermal Power | Ningxia Building vs. Shanghai Yanpu Metal | Ningxia Building vs. Zhongshan Public Utilities |
| Hua Xia vs. Xinjiang Communications Construction | Hua Xia vs. Shandong Publishing Media | Hua Xia vs. Southern PublishingMedia Co | Hua Xia vs. Eastern 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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