Correlation Between Ningxia Building and Nancal Energy
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By analyzing existing cross correlation between Ningxia Building Materials and Nancal Energy Saving Tech, you can compare the effects of market volatilities on Ningxia Building and Nancal Energy 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 Nancal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Building and Nancal Energy.
Diversification Opportunities for Ningxia Building and Nancal Energy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningxia and Nancal is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Building Materials and Nancal Energy Saving Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nancal Energy Saving 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 Nancal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nancal Energy Saving has no effect on the direction of Ningxia Building i.e., Ningxia Building and Nancal Energy go up and down completely randomly.
Pair Corralation between Ningxia Building and Nancal Energy
Assuming the 90 days trading horizon Ningxia Building is expected to generate 25.12 times less return on investment than Nancal Energy. But when comparing it to its historical volatility, Ningxia Building Materials is 1.95 times less risky than Nancal Energy. It trades about 0.03 of its potential returns per unit of risk. Nancal Energy Saving Tech is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,976 in Nancal Energy Saving Tech on August 24, 2024 and sell it today you would earn a total of 1,220 from holding Nancal Energy Saving Tech or generate 61.74% 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. Nancal Energy Saving Tech
Performance |
| Timeline |
| Ningxia Building Mat |
| Nancal Energy Saving |
Ningxia Building and Nancal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Building and Nancal Energy
The main advantage of trading using opposite Ningxia Building and Nancal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Building position performs unexpectedly, Nancal Energy 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 Nancal Energy will offset losses from the drop in Nancal Energy's long position.| Ningxia Building vs. Zijin Mining Group | Ningxia Building vs. Wanhua Chemical Group | Ningxia Building vs. Baoshan Iron Steel | Ningxia Building vs. Rongsheng Petrochemical Co |
| Nancal Energy vs. Chengdu Kanghua Biological | Nancal Energy vs. Beijing Wantai Biological | Nancal Energy vs. Suzhou Novoprotein Scientific | Nancal Energy vs. Aluminum Corp of |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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