Correlation Between Bank of Jiangsu Co Ltd and Ningbo Fangzheng
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By analyzing existing cross correlation between Bank of Jiangsu and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Bank of Jiangsu Co Ltd 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 Bank of Jiangsu Co Ltd with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Jiangsu Co Ltd and Ningbo Fangzheng.
Diversification Opportunities for Bank of Jiangsu Co Ltd and Ningbo Fangzheng
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Ningbo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Jiangsu 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 Bank of Jiangsu Co Ltd 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 Bank of Jiangsu 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 Bank of Jiangsu Co Ltd i.e., Bank of Jiangsu Co Ltd and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Bank of Jiangsu Co Ltd and Ningbo Fangzheng
Assuming the 90 days trading horizon Bank of Jiangsu is expected to generate 0.41 times more return on investment than Ningbo Fangzheng. However, Bank of Jiangsu is 2.42 times less risky than Ningbo Fangzheng. It trades about 0.05 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.02 per unit of risk. If you would invest 686.00 in Bank of Jiangsu on September 2, 2024 and sell it today you would earn a total of 219.00 from holding Bank of Jiangsu or generate 31.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Jiangsu vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Bank of Jiangsu Co Ltd |
| Ningbo Fangzheng Aut |
Bank of Jiangsu Co Ltd and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Jiangsu Co Ltd and Ningbo Fangzheng
The main advantage of trading using opposite Bank of Jiangsu Co Ltd and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Jiangsu Co Ltd 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.| Bank of Jiangsu Co Ltd vs. Shanghai Yanpu Metal | Bank of Jiangsu Co Ltd vs. Shengda Mining Co | Bank of Jiangsu Co Ltd vs. Chengtun Mining Group | Bank of Jiangsu Co Ltd vs. Will Semiconductor Co |
| Ningbo Fangzheng vs. Guangdong Xiongsu Technology | Ningbo Fangzheng vs. Bengang Steel Plates | Ningbo Fangzheng vs. Maxvision Technology Corp | Ningbo Fangzheng vs. Tianshui Huatian Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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