Correlation Between Ningbo Construction and Qingdao Foods
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By analyzing existing cross correlation between Ningbo Construction Co and Qingdao Foods Co, you can compare the effects of market volatilities on Ningbo Construction and Qingdao Foods 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 Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Qingdao Foods.
Diversification Opportunities for Ningbo Construction and Qingdao Foods
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Qingdao is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Foods 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 Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Qingdao Foods go up and down completely randomly.
Pair Corralation between Ningbo Construction and Qingdao Foods
Assuming the 90 days trading horizon Ningbo Construction Co is expected to generate 1.07 times more return on investment than Qingdao Foods. However, Ningbo Construction is 1.07 times more volatile than Qingdao Foods Co. It trades about -0.09 of its potential returns per unit of risk. Qingdao Foods Co is currently generating about -0.13 per unit of risk. If you would invest 434.00 in Ningbo Construction Co on November 3, 2024 and sell it today you would lose (15.00) from holding Ningbo Construction Co or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Construction Co vs. Qingdao Foods Co
Performance |
| Timeline |
| Ningbo Construction |
| Qingdao Foods |
Ningbo Construction and Qingdao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Qingdao Foods
The main advantage of trading using opposite Ningbo Construction and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.| Ningbo Construction vs. Olympic Circuit Technology | Ningbo Construction vs. Sharetronic Data Technology | Ningbo Construction vs. Kuang Chi Technologies | Ningbo Construction vs. Sinofibers Technology Co |
| Qingdao Foods vs. China Longyuan Power | Qingdao Foods vs. PetroChina Co Ltd | Qingdao Foods vs. Guangxi Guiguan Electric | Qingdao Foods vs. Yantai North Andre |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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