Correlation Between Ningbo Thermal and China Railway
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By analyzing existing cross correlation between Ningbo Thermal Power and China Railway Construction, you can compare the effects of market volatilities on Ningbo Thermal and China Railway 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 Ningbo Thermal with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Thermal and China Railway.
Diversification Opportunities for Ningbo Thermal and China Railway
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and China is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Thermal Power and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and Ningbo Thermal 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 Ningbo Thermal Power are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Ningbo Thermal i.e., Ningbo Thermal and China Railway go up and down completely randomly.
Pair Corralation between Ningbo Thermal and China Railway
Assuming the 90 days trading horizon Ningbo Thermal Power is expected to generate 4.45 times more return on investment than China Railway. However, Ningbo Thermal is 4.45 times more volatile than China Railway Construction. It trades about 0.09 of its potential returns per unit of risk. China Railway Construction is currently generating about 0.05 per unit of risk. If you would invest 393.00 in Ningbo Thermal Power on September 28, 2024 and sell it today you would earn a total of 31.00 from holding Ningbo Thermal Power or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Thermal Power vs. China Railway Construction
Performance |
| Timeline |
| Ningbo Thermal Power |
| China Railway Constr |
Ningbo Thermal and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Thermal and China Railway
The main advantage of trading using opposite Ningbo Thermal and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Thermal position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Ningbo Thermal vs. BeiGene | Ningbo Thermal vs. Kweichow Moutai Co | Ningbo Thermal vs. Beijing Roborock Technology | Ningbo Thermal vs. G bits Network Technology |
| China Railway vs. Ming Yang Smart | China Railway vs. 159681 | China Railway vs. 159005 | China Railway vs. Loctek Ergonomic 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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