Correlation Between Ningxia Building and GreenTech Environmental
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By analyzing existing cross correlation between Ningxia Building Materials and GreenTech Environmental Co, you can compare the effects of market volatilities on Ningxia Building and GreenTech Environmental 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 GreenTech Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Building and GreenTech Environmental.
Diversification Opportunities for Ningxia Building and GreenTech Environmental
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningxia and GreenTech is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Building Materials and GreenTech Environmental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTech Environmental 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 GreenTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTech Environmental has no effect on the direction of Ningxia Building i.e., Ningxia Building and GreenTech Environmental go up and down completely randomly.
Pair Corralation between Ningxia Building and GreenTech Environmental
Assuming the 90 days trading horizon Ningxia Building Materials is expected to under-perform the GreenTech Environmental. In addition to that, Ningxia Building is 1.24 times more volatile than GreenTech Environmental Co. It trades about -0.16 of its total potential returns per unit of risk. GreenTech Environmental Co is currently generating about 0.12 per unit of volatility. If you would invest 1,335 in GreenTech Environmental Co on November 3, 2024 and sell it today you would earn a total of 50.00 from holding GreenTech Environmental Co or generate 3.75% 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. GreenTech Environmental Co
Performance |
| Timeline |
| Ningxia Building Mat |
| GreenTech Environmental |
Ningxia Building and GreenTech Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Building and GreenTech Environmental
The main advantage of trading using opposite Ningxia Building and GreenTech Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Building position performs unexpectedly, GreenTech Environmental 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 GreenTech Environmental will offset losses from the drop in GreenTech Environmental'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 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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