Correlation Between Jiangsu Financial and Ningbo Fangzheng
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Jiangsu Financial 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 Jiangsu Financial with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Ningbo Fangzheng.
Diversification Opportunities for Jiangsu Financial and Ningbo Fangzheng
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangsu and Ningbo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing 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 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 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 Jiangsu Financial i.e., Jiangsu Financial and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Ningbo Fangzheng
Assuming the 90 days trading horizon Jiangsu Financial Leasing is expected to under-perform the Ningbo Fangzheng. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Financial Leasing is 1.66 times less risky than Ningbo Fangzheng. The stock trades about -0.13 of its potential returns per unit of risk. The Ningbo Fangzheng Automobile is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,551 in Ningbo Fangzheng Automobile on August 28, 2024 and sell it today you would lose (7.00) from holding Ningbo Fangzheng Automobile or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Jiangsu Financial Leasing |
| Ningbo Fangzheng Aut |
Jiangsu Financial and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Ningbo Fangzheng
The main advantage of trading using opposite Jiangsu Financial and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial 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.| Jiangsu Financial vs. Kweichow Moutai Co | Jiangsu Financial vs. Contemporary Amperex Technology | Jiangsu Financial vs. G bits Network Technology | Jiangsu Financial vs. Beijing Roborock Technology |
| Ningbo Fangzheng vs. Loongson Technology Corp | Ningbo Fangzheng vs. Chongqing Road Bridge | Ningbo Fangzheng vs. Shenzhen Fortune Trend | Ningbo Fangzheng vs. Wuhan Xianglong Power |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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