Correlation Between Ningbo Construction and Tongling Nonferrous
Specify exactly 2 symbols:
By analyzing existing cross correlation between Ningbo Construction Co and Tongling Nonferrous Metals, you can compare the effects of market volatilities on Ningbo Construction and Tongling Nonferrous 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 Construction with a short position of Tongling Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Tongling Nonferrous.
Diversification Opportunities for Ningbo Construction and Tongling Nonferrous
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Tongling is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Tongling Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongling Nonferrous and Ningbo Construction 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 Construction Co are associated (or correlated) with Tongling Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongling Nonferrous has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Tongling Nonferrous go up and down completely randomly.
Pair Corralation between Ningbo Construction and Tongling Nonferrous
Assuming the 90 days trading horizon Ningbo Construction is expected to generate 1.11 times less return on investment than Tongling Nonferrous. In addition to that, Ningbo Construction is 1.16 times more volatile than Tongling Nonferrous Metals. It trades about 0.04 of its total potential returns per unit of risk. Tongling Nonferrous Metals is currently generating about 0.05 per unit of volatility. If you would invest 284.00 in Tongling Nonferrous Metals on September 14, 2024 and sell it today you would earn a total of 74.00 from holding Tongling Nonferrous Metals or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Construction Co vs. Tongling Nonferrous Metals
Performance |
| Timeline |
| Ningbo Construction |
| Tongling Nonferrous |
Ningbo Construction and Tongling Nonferrous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Tongling Nonferrous
The main advantage of trading using opposite Ningbo Construction and Tongling Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Tongling Nonferrous 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 Tongling Nonferrous will offset losses from the drop in Tongling Nonferrous' long position.The idea behind Ningbo Construction Co and Tongling Nonferrous Metals 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.
| Tongling Nonferrous vs. Zijin Mining Group | Tongling Nonferrous vs. Wanhua Chemical Group | Tongling Nonferrous vs. Baoshan Iron Steel | Tongling Nonferrous vs. Shandong Gold Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |