Correlation Between Changchun Faway and Ningbo Jintian
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By analyzing existing cross correlation between Changchun Faway Automobile and Ningbo Jintian Copper, you can compare the effects of market volatilities on Changchun Faway and Ningbo Jintian 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 Changchun Faway with a short position of Ningbo Jintian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Ningbo Jintian.
Diversification Opportunities for Changchun Faway and Ningbo Jintian
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Ningbo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Ningbo Jintian Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jintian Copper and Changchun Faway 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 Changchun Faway Automobile are associated (or correlated) with Ningbo Jintian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jintian Copper has no effect on the direction of Changchun Faway i.e., Changchun Faway and Ningbo Jintian go up and down completely randomly.
Pair Corralation between Changchun Faway and Ningbo Jintian
Assuming the 90 days trading horizon Changchun Faway is expected to generate 19.0 times less return on investment than Ningbo Jintian. But when comparing it to its historical volatility, Changchun Faway Automobile is 1.14 times less risky than Ningbo Jintian. It trades about 0.01 of its potential returns per unit of risk. Ningbo Jintian Copper is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 599.00 in Ningbo Jintian Copper on September 12, 2024 and sell it today you would earn a total of 72.00 from holding Ningbo Jintian Copper or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Ningbo Jintian Copper
Performance |
| Timeline |
| Changchun Faway Auto |
| Ningbo Jintian Copper |
Changchun Faway and Ningbo Jintian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Ningbo Jintian
The main advantage of trading using opposite Changchun Faway and Ningbo Jintian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, Ningbo Jintian 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 Jintian will offset losses from the drop in Ningbo Jintian's long position.| Changchun Faway vs. Lutian Machinery Co | Changchun Faway vs. PetroChina Co Ltd | Changchun Faway vs. Bank of China | Changchun Faway vs. Gansu Jiu Steel |
| Ningbo Jintian vs. Guangzhou Automobile Group | Ningbo Jintian vs. Anhui Jianghuai Automobile | Ningbo Jintian vs. Changchun Faway Automobile | Ningbo Jintian vs. Chengdu Xinzhu RoadBridge |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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