Correlation Between China Railway and Ningbo Boway
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By analyzing existing cross correlation between China Railway Group and Ningbo Boway Alloy, you can compare the effects of market volatilities on China Railway and Ningbo Boway 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 Boway. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Ningbo Boway.
Diversification Opportunities for China Railway and Ningbo Boway
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Ningbo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Group and Ningbo Boway Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Boway Alloy 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 Boway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Boway Alloy has no effect on the direction of China Railway i.e., China Railway and Ningbo Boway go up and down completely randomly.
Pair Corralation between China Railway and Ningbo Boway
Assuming the 90 days trading horizon China Railway is expected to generate 4.43 times less return on investment than Ningbo Boway. But when comparing it to its historical volatility, China Railway Group is 2.45 times less risky than Ningbo Boway. It trades about 0.02 of its potential returns per unit of risk. Ningbo Boway Alloy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,764 in Ningbo Boway Alloy on October 15, 2024 and sell it today you would earn a total of 124.00 from holding Ningbo Boway Alloy or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.95% |
| Values | Daily Returns |
China Railway Group vs. Ningbo Boway Alloy
Performance |
| Timeline |
| China Railway Group |
| Ningbo Boway Alloy |
China Railway and Ningbo Boway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Ningbo Boway
The main advantage of trading using opposite China Railway and Ningbo Boway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Ningbo Boway 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 Boway will offset losses from the drop in Ningbo Boway's long position.| China Railway vs. Tangel Publishing | China Railway vs. COL Digital Publishing | China Railway vs. Shenzhen Clou Electronics | China Railway vs. Leyard Optoelectronic |
| Ningbo Boway vs. Huasi Agricultural Development | Ningbo Boway vs. Allied Machinery Co | Ningbo Boway vs. Gifore Agricultural Machinery | Ningbo Boway vs. Zoje Resources Investment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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