Correlation Between China Railway and Ningbo Ligong
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By analyzing existing cross correlation between China Railway Group and Ningbo Ligong Online, you can compare the effects of market volatilities on China Railway and Ningbo Ligong 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 China Railway with a short position of Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Ningbo Ligong.
Diversification Opportunities for China Railway and Ningbo Ligong
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Ningbo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online and China Railway 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 China Railway Group are associated (or correlated) with Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of China Railway i.e., China Railway and Ningbo Ligong go up and down completely randomly.
Pair Corralation between China Railway and Ningbo Ligong
Assuming the 90 days trading horizon China Railway Group is expected to generate 1.11 times more return on investment than Ningbo Ligong. However, China Railway is 1.11 times more volatile than Ningbo Ligong Online. It trades about -0.02 of its potential returns per unit of risk. Ningbo Ligong Online is currently generating about -0.11 per unit of risk. If you would invest 664.00 in China Railway Group on September 13, 2024 and sell it today you would lose (7.00) from holding China Railway Group or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Group vs. Ningbo Ligong Online
Performance |
| Timeline |
| China Railway Group |
| Ningbo Ligong Online |
China Railway and Ningbo Ligong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Ningbo Ligong
The main advantage of trading using opposite China Railway and Ningbo Ligong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Ningbo Ligong 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 Ligong will offset losses from the drop in Ningbo Ligong's long position.| China Railway vs. Hangzhou Weiguang Electronic | China Railway vs. Fuzhou Rockchip Electronics | China Railway vs. YiDong Electronics Technology | China Railway vs. LianChuang Electronic Technology |
| Ningbo Ligong vs. China Petroleum Chemical | Ningbo Ligong vs. PetroChina Co Ltd | Ningbo Ligong vs. China State Construction | Ningbo Ligong vs. China Railway Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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