Correlation Between Tengda Construction and Ningbo Fangzheng
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By analyzing existing cross correlation between Tengda Construction Group and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Tengda Construction and Ningbo Fangzheng 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 Tengda Construction with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tengda Construction and Ningbo Fangzheng.
Diversification Opportunities for Tengda Construction and Ningbo Fangzheng
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tengda and Ningbo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tengda Construction Group and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and Tengda Construction 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 Tengda Construction Group are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Tengda Construction i.e., Tengda Construction and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Tengda Construction and Ningbo Fangzheng
Assuming the 90 days trading horizon Tengda Construction Group is expected to generate 0.56 times more return on investment than Ningbo Fangzheng. However, Tengda Construction Group is 1.78 times less risky than Ningbo Fangzheng. It trades about 0.1 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.03 per unit of risk. If you would invest 194.00 in Tengda Construction Group on September 27, 2024 and sell it today you would earn a total of 48.00 from holding Tengda Construction Group or generate 24.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tengda Construction Group vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Tengda Construction |
| Ningbo Fangzheng Aut |
Tengda Construction and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tengda Construction and Ningbo Fangzheng
The main advantage of trading using opposite Tengda Construction and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tengda Construction position performs unexpectedly, Ningbo Fangzheng 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 Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Tengda Construction vs. Ming Yang Smart | Tengda Construction vs. 159681 | Tengda Construction vs. 159005 | Tengda Construction vs. Loctek Ergonomic Technology |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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