Correlation Between China State and Ningbo Tip
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By analyzing existing cross correlation between China State Construction and Ningbo Tip Rubber, you can compare the effects of market volatilities on China State and Ningbo Tip 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 Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Ningbo Tip.
Diversification Opportunities for China State and Ningbo Tip
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Ningbo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Ningbo Tip Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tip Rubber 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 Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tip Rubber has no effect on the direction of China State i.e., China State and Ningbo Tip go up and down completely randomly.
Pair Corralation between China State and Ningbo Tip
Assuming the 90 days trading horizon China State is expected to generate 1.83 times less return on investment than Ningbo Tip. In addition to that, China State is 1.03 times more volatile than Ningbo Tip Rubber. It trades about 0.09 of its total potential returns per unit of risk. Ningbo Tip Rubber is currently generating about 0.16 per unit of volatility. If you would invest 1,084 in Ningbo Tip Rubber on September 2, 2024 and sell it today you would earn a total of 309.00 from holding Ningbo Tip Rubber or generate 28.51% 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 Tip Rubber
Performance |
| Timeline |
| China State Construction |
| Ningbo Tip Rubber |
China State and Ningbo Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Ningbo Tip
The main advantage of trading using opposite China State and Ningbo Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Ningbo Tip 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 Tip will offset losses from the drop in Ningbo Tip's long position.| China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic Technology | China State vs. 516220 |
| Ningbo Tip vs. BYD Co Ltd | Ningbo Tip vs. China Mobile Limited | Ningbo Tip vs. Agricultural Bank of | Ningbo Tip vs. Industrial and Commercial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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