Correlation Between Changjiang Jinggong and Ningbo MedicalSystem
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By analyzing existing cross correlation between Changjiang Jinggong Steel and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Changjiang Jinggong and Ningbo MedicalSystem 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 Changjiang Jinggong with a short position of Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Jinggong and Ningbo MedicalSystem.
Diversification Opportunities for Changjiang Jinggong and Ningbo MedicalSystem
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changjiang and Ningbo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Jinggong Steel and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem and Changjiang Jinggong 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 Changjiang Jinggong Steel are associated (or correlated) with Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Changjiang Jinggong i.e., Changjiang Jinggong and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Changjiang Jinggong and Ningbo MedicalSystem
Assuming the 90 days trading horizon Changjiang Jinggong Steel is expected to under-perform the Ningbo MedicalSystem. But the stock apears to be less risky and, when comparing its historical volatility, Changjiang Jinggong Steel is 1.83 times less risky than Ningbo MedicalSystem. The stock trades about -0.08 of its potential returns per unit of risk. The Ningbo MedicalSystem Biotechnology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,082 in Ningbo MedicalSystem Biotechnology on September 3, 2024 and sell it today you would earn a total of 79.00 from holding Ningbo MedicalSystem Biotechnology or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Jinggong Steel vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Changjiang Jinggong Steel |
| Ningbo MedicalSystem |
Changjiang Jinggong and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Jinggong and Ningbo MedicalSystem
The main advantage of trading using opposite Changjiang Jinggong and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Jinggong position performs unexpectedly, Ningbo MedicalSystem 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 MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.| Changjiang Jinggong vs. China Life Insurance | Changjiang Jinggong vs. HaiXin Foods Co | Changjiang Jinggong vs. Ping An Insurance | Changjiang Jinggong vs. China Publishing Media |
| Ningbo MedicalSystem vs. Chengdu Kanghua Biological | Ningbo MedicalSystem vs. Beijing Wantai Biological | Ningbo MedicalSystem vs. Suzhou Novoprotein Scientific | Ningbo MedicalSystem 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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