Correlation Between Tengda Construction and Ningbo Construction
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By analyzing existing cross correlation between Tengda Construction Group and Ningbo Construction Co, you can compare the effects of market volatilities on Tengda Construction and Ningbo Construction 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 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tengda Construction and Ningbo Construction.
Diversification Opportunities for Tengda Construction and Ningbo Construction
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tengda and Ningbo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tengda Construction Group and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction 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 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Tengda Construction i.e., Tengda Construction and Ningbo Construction go up and down completely randomly.
Pair Corralation between Tengda Construction and Ningbo Construction
Assuming the 90 days trading horizon Tengda Construction Group is expected to under-perform the Ningbo Construction. But the stock apears to be less risky and, when comparing its historical volatility, Tengda Construction Group is 1.45 times less risky than Ningbo Construction. The stock trades about 0.0 of its potential returns per unit of risk. The Ningbo Construction Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 438.00 in Ningbo Construction Co on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Ningbo Construction Co or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tengda Construction Group vs. Ningbo Construction Co
Performance |
| Timeline |
| Tengda Construction |
| Ningbo Construction |
Tengda Construction and Ningbo Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tengda Construction and Ningbo Construction
The main advantage of trading using opposite Tengda Construction and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tengda Construction position performs unexpectedly, Ningbo Construction 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 Construction will offset losses from the drop in Ningbo Construction's long position.| Tengda Construction vs. Zhejiang Kingland Pipeline | Tengda Construction vs. Longmaster Information Tech | Tengda Construction vs. Yonyou Auto Information | Tengda Construction vs. Keda Clean Energy |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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