Correlation Between Ningbo Jintian and China Molybdenum
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By analyzing existing cross correlation between Ningbo Jintian Copper and China Molybdenum Co, you can compare the effects of market volatilities on Ningbo Jintian and China Molybdenum 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 China Molybdenum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Jintian and China Molybdenum.
Diversification Opportunities for Ningbo Jintian and China Molybdenum
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ningbo and China is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Jintian Copper and China Molybdenum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Molybdenum 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 China Molybdenum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Molybdenum has no effect on the direction of Ningbo Jintian i.e., Ningbo Jintian and China Molybdenum go up and down completely randomly.
Pair Corralation between Ningbo Jintian and China Molybdenum
Assuming the 90 days trading horizon Ningbo Jintian Copper is expected to generate 0.94 times more return on investment than China Molybdenum. However, Ningbo Jintian Copper is 1.07 times less risky than China Molybdenum. It trades about 0.54 of its potential returns per unit of risk. China Molybdenum Co is currently generating about 0.2 per unit of risk. If you would invest 562.00 in Ningbo Jintian Copper on November 9, 2024 and sell it today you would earn a total of 59.00 from holding Ningbo Jintian Copper or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Jintian Copper vs. China Molybdenum Co
Performance |
| Timeline |
| Ningbo Jintian Copper |
Risk-Adjusted Performance
Weak
Weak | Strong |
| China Molybdenum |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Ningbo Jintian and China Molybdenum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Jintian and China Molybdenum
The main advantage of trading using opposite Ningbo Jintian and China Molybdenum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Jintian position performs unexpectedly, China Molybdenum 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 China Molybdenum will offset losses from the drop in China Molybdenum's long position.The idea behind Ningbo Jintian Copper and China Molybdenum Co 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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