Correlation Between Ye Chiu and Ningbo Fangzheng
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By analyzing existing cross correlation between Ye Chiu Metal and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Ye Chiu 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 Ye Chiu with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ye Chiu and Ningbo Fangzheng.
Diversification Opportunities for Ye Chiu and Ningbo Fangzheng
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 601388 and Ningbo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ye Chiu Metal 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 Ye Chiu 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 Ye Chiu Metal 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 Ye Chiu i.e., Ye Chiu and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Ye Chiu and Ningbo Fangzheng
Assuming the 90 days trading horizon Ye Chiu Metal is expected to under-perform the Ningbo Fangzheng. But the stock apears to be less risky and, when comparing its historical volatility, Ye Chiu Metal is 1.84 times less risky than Ningbo Fangzheng. The stock trades about -0.34 of its potential returns per unit of risk. The Ningbo Fangzheng Automobile is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,571 in Ningbo Fangzheng Automobile on October 25, 2024 and sell it today you would lose (115.00) from holding Ningbo Fangzheng Automobile or give up 7.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ye Chiu Metal vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Ye Chiu Metal |
| Ningbo Fangzheng Aut |
Ye Chiu and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ye Chiu and Ningbo Fangzheng
The main advantage of trading using opposite Ye Chiu and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ye Chiu 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.| Ye Chiu vs. Zijin Mining Group | Ye Chiu vs. Wanhua Chemical Group | Ye Chiu vs. Baoshan Iron Steel | Ye Chiu vs. Rongsheng Petrochemical Co |
| Ningbo Fangzheng vs. Jahen Household Products | Ningbo Fangzheng vs. Jinsanjiang Silicon Material | Ningbo Fangzheng vs. Xinxiang Chemical Fiber | Ningbo Fangzheng vs. Ningxia Younglight Chemicals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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