Correlation Between China State and Ningbo Fangzheng
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By analyzing existing cross correlation between China State Construction and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on China State 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 China State with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Ningbo Fangzheng.
Diversification Opportunities for China State and Ningbo Fangzheng
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Ningbo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction 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 China State 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 State Construction 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 China State i.e., China State and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between China State and Ningbo Fangzheng
Assuming the 90 days trading horizon China State is expected to generate 1.83 times less return on investment than Ningbo Fangzheng. But when comparing it to its historical volatility, China State Construction is 1.45 times less risky than Ningbo Fangzheng. It trades about 0.09 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,303 in Ningbo Fangzheng Automobile on September 2, 2024 and sell it today you would earn a total of 320.00 from holding Ningbo Fangzheng Automobile or generate 24.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| China State Construction |
| Ningbo Fangzheng Aut |
China State and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Ningbo Fangzheng
The main advantage of trading using opposite China State and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State 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.| China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic Technology | China State vs. 516220 |
| Ningbo Fangzheng vs. Guangdong Xiongsu Technology | Ningbo Fangzheng vs. Bengang Steel Plates | Ningbo Fangzheng vs. Maxvision Technology Corp | Ningbo Fangzheng vs. Tianshui Huatian Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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