Correlation Between Ningbo Jintian and Hubei Forbon
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By analyzing existing cross correlation between Ningbo Jintian Copper and Hubei Forbon Technology, you can compare the effects of market volatilities on Ningbo Jintian and Hubei Forbon 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 Jintian with a short position of Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Jintian and Hubei Forbon.
Diversification Opportunities for Ningbo Jintian and Hubei Forbon
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Hubei is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Jintian Copper and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology and Ningbo Jintian 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 Jintian Copper are associated (or correlated) with Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Ningbo Jintian i.e., Ningbo Jintian and Hubei Forbon go up and down completely randomly.
Pair Corralation between Ningbo Jintian and Hubei Forbon
Assuming the 90 days trading horizon Ningbo Jintian is expected to generate 1.5 times less return on investment than Hubei Forbon. But when comparing it to its historical volatility, Ningbo Jintian Copper is 1.39 times less risky than Hubei Forbon. It trades about 0.29 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 756.00 in Hubei Forbon Technology on November 7, 2024 and sell it today you would earn a total of 74.00 from holding Hubei Forbon Technology or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Jintian Copper vs. Hubei Forbon Technology
Performance |
| Timeline |
| Ningbo Jintian Copper |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Hubei Forbon Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Ningbo Jintian and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Jintian and Hubei Forbon
The main advantage of trading using opposite Ningbo Jintian and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Jintian position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon's long position.The idea behind Ningbo Jintian Copper and Hubei Forbon Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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