Correlation Between Jiangsu Financial and Ningbo Tech
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Ningbo Tech Bank Co, you can compare the effects of market volatilities on Jiangsu Financial and Ningbo Tech 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 Jiangsu Financial with a short position of Ningbo Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Ningbo Tech.
Diversification Opportunities for Jiangsu Financial and Ningbo Tech
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Ningbo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing and Ningbo Tech Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tech Bank and Jiangsu Financial 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 Jiangsu Financial Leasing are associated (or correlated) with Ningbo Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tech Bank has no effect on the direction of Jiangsu Financial i.e., Jiangsu Financial and Ningbo Tech go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Ningbo Tech
Assuming the 90 days trading horizon Jiangsu Financial is expected to generate 4.18 times less return on investment than Ningbo Tech. But when comparing it to its historical volatility, Jiangsu Financial Leasing is 1.67 times less risky than Ningbo Tech. It trades about 0.06 of its potential returns per unit of risk. Ningbo Tech Bank Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 290.00 in Ningbo Tech Bank Co on August 31, 2024 and sell it today you would earn a total of 28.00 from holding Ningbo Tech Bank Co or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Ningbo Tech Bank Co
Performance |
| Timeline |
| Jiangsu Financial Leasing |
| Ningbo Tech Bank |
Jiangsu Financial and Ningbo Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Ningbo Tech
The main advantage of trading using opposite Jiangsu Financial and Ningbo Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial position performs unexpectedly, Ningbo Tech 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 Tech will offset losses from the drop in Ningbo Tech's long position.| Jiangsu Financial vs. Agricultural Bank of | Jiangsu Financial vs. Hangzhou Pinming Software | Jiangsu Financial vs. Shandong Mining Machinery | Jiangsu Financial vs. GuoChuang Software Co |
| Ningbo Tech vs. Zhengzhou Qianweiyangchu Food | Ningbo Tech vs. Ligao Foods CoLtd | Ningbo Tech vs. Shaanxi Meineng Clean | Ningbo Tech vs. Sichuan Teway Food |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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