Correlation Between Eastern Air and Ningbo Fangzheng
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By analyzing existing cross correlation between Eastern Air Logistics and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Eastern Air 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 Eastern Air with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Air and Ningbo Fangzheng.
Diversification Opportunities for Eastern Air and Ningbo Fangzheng
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Ningbo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Air Logistics 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 Eastern Air 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 Eastern Air Logistics 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 Eastern Air i.e., Eastern Air and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Eastern Air and Ningbo Fangzheng
Assuming the 90 days trading horizon Eastern Air Logistics is expected to under-perform the Ningbo Fangzheng. But the stock apears to be less risky and, when comparing its historical volatility, Eastern Air Logistics is 1.93 times less risky than Ningbo Fangzheng. The stock trades about -0.2 of its potential returns per unit of risk. The Ningbo Fangzheng Automobile is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,551 in Ningbo Fangzheng Automobile on August 27, 2024 and sell it today you would lose (61.00) from holding Ningbo Fangzheng Automobile or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Air Logistics vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Eastern Air Logistics |
| Ningbo Fangzheng Aut |
Eastern Air and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Air and Ningbo Fangzheng
The main advantage of trading using opposite Eastern Air and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Air 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.| Eastern Air vs. China Life Insurance | Eastern Air vs. Piotech Inc A | Eastern Air vs. Dongxing Sec Co | Eastern Air vs. Shanghai OPM Biosciences |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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