Correlation Between Ningbo Boway and Liaoning Chengda
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By analyzing existing cross correlation between Ningbo Boway Alloy and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Ningbo Boway and Liaoning Chengda 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 Boway with a short position of Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Boway and Liaoning Chengda.
Diversification Opportunities for Ningbo Boway and Liaoning Chengda
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Liaoning is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Boway Alloy and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio and Ningbo Boway 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 Boway Alloy are associated (or correlated) with Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Ningbo Boway i.e., Ningbo Boway and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Ningbo Boway and Liaoning Chengda
Assuming the 90 days trading horizon Ningbo Boway Alloy is expected to generate 3.38 times more return on investment than Liaoning Chengda. However, Ningbo Boway is 3.38 times more volatile than Liaoning Chengda Biotechnology. It trades about 0.03 of its potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.01 per unit of risk. If you would invest 1,661 in Ningbo Boway Alloy on September 28, 2024 and sell it today you would earn a total of 340.00 from holding Ningbo Boway Alloy or generate 20.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.75% |
| Values | Daily Returns |
Ningbo Boway Alloy vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Ningbo Boway Alloy |
| Liaoning Chengda Bio |
Ningbo Boway and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Boway and Liaoning Chengda
The main advantage of trading using opposite Ningbo Boway and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Boway position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Ningbo Boway vs. Shanghai Broadband Technology | Ningbo Boway vs. Anhui Huaheng Biotechnology | Ningbo Boway vs. Sichuan Hebang Biotechnology | Ningbo Boway vs. RoadMain T Co |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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