Correlation Between Datang HuaYin and Ningbo MedicalSystem
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By analyzing existing cross correlation between Datang HuaYin Electric and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Datang HuaYin 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 Datang HuaYin with a short position of Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang HuaYin and Ningbo MedicalSystem.
Diversification Opportunities for Datang HuaYin and Ningbo MedicalSystem
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Datang and Ningbo is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Datang HuaYin Electric and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem and Datang HuaYin 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 Datang HuaYin Electric 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 Datang HuaYin i.e., Datang HuaYin and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Datang HuaYin and Ningbo MedicalSystem
Assuming the 90 days trading horizon Datang HuaYin Electric is expected to under-perform the Ningbo MedicalSystem. But the stock apears to be less risky and, when comparing its historical volatility, Datang HuaYin Electric is 1.13 times less risky than Ningbo MedicalSystem. The stock trades about -0.02 of its potential returns per unit of risk. The Ningbo MedicalSystem Biotechnology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,168 in Ningbo MedicalSystem Biotechnology on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Ningbo MedicalSystem Biotechnology or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang HuaYin Electric vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Datang HuaYin Electric |
| Ningbo MedicalSystem |
Datang HuaYin and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang HuaYin and Ningbo MedicalSystem
The main advantage of trading using opposite Datang HuaYin and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang HuaYin 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.| Datang HuaYin vs. Gansu Jiu Steel | Datang HuaYin vs. Shandong Mining Machinery | Datang HuaYin vs. Aba Chemicals Corp | Datang HuaYin vs. BlueFocus Communication Group |
| Ningbo MedicalSystem vs. Cultural Investment Holdings | Ningbo MedicalSystem vs. Gome Telecom Equipment | Ningbo MedicalSystem vs. Holitech Technology Co | Ningbo MedicalSystem vs. Zotye Automobile Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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