Correlation Between Pengxin International and Ningbo Thermal
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By analyzing existing cross correlation between Pengxin International Mining and Ningbo Thermal Power, you can compare the effects of market volatilities on Pengxin International and Ningbo Thermal 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 Pengxin International with a short position of Ningbo Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Ningbo Thermal.
Diversification Opportunities for Pengxin International and Ningbo Thermal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pengxin and Ningbo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Ningbo Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Thermal Power and Pengxin International 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 Pengxin International Mining are associated (or correlated) with Ningbo Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Thermal Power has no effect on the direction of Pengxin International i.e., Pengxin International and Ningbo Thermal go up and down completely randomly.
Pair Corralation between Pengxin International and Ningbo Thermal
Assuming the 90 days trading horizon Pengxin International Mining is expected to generate 1.98 times more return on investment than Ningbo Thermal. However, Pengxin International is 1.98 times more volatile than Ningbo Thermal Power. It trades about 0.23 of its potential returns per unit of risk. Ningbo Thermal Power is currently generating about 0.21 per unit of risk. If you would invest 214.00 in Pengxin International Mining on September 12, 2024 and sell it today you would earn a total of 134.00 from holding Pengxin International Mining or generate 62.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.28% |
| Values | Daily Returns |
Pengxin International Mining vs. Ningbo Thermal Power
Performance |
| Timeline |
| Pengxin International |
| Ningbo Thermal Power |
Pengxin International and Ningbo Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Ningbo Thermal
The main advantage of trading using opposite Pengxin International and Ningbo Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Ningbo Thermal 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 Ningbo Thermal will offset losses from the drop in Ningbo Thermal's long position.| Pengxin International vs. Zijin Mining Group | Pengxin International vs. Wanhua Chemical Group | Pengxin International vs. Baoshan Iron Steel | Pengxin International vs. Shandong Gold Mining |
| Ningbo Thermal vs. Bank of China | Ningbo Thermal vs. Kweichow Moutai Co | Ningbo Thermal vs. PetroChina Co Ltd | Ningbo Thermal vs. Bank of Communications |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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