Correlation Between Ningbo Construction and Western Metal
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By analyzing existing cross correlation between Ningbo Construction Co and Western Metal Materials, you can compare the effects of market volatilities on Ningbo Construction and Western Metal 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 Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Western Metal.
Diversification Opportunities for Ningbo Construction and Western Metal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Western is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials 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 Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Western Metal go up and down completely randomly.
Pair Corralation between Ningbo Construction and Western Metal
Assuming the 90 days trading horizon Ningbo Construction Co is expected to generate 1.04 times more return on investment than Western Metal. However, Ningbo Construction is 1.04 times more volatile than Western Metal Materials. It trades about 0.09 of its potential returns per unit of risk. Western Metal Materials is currently generating about 0.03 per unit of risk. If you would invest 382.00 in Ningbo Construction Co on September 12, 2024 and sell it today you would earn a total of 112.00 from holding Ningbo Construction Co or generate 29.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Construction Co vs. Western Metal Materials
Performance |
| Timeline |
| Ningbo Construction |
| Western Metal Materials |
Ningbo Construction and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Western Metal
The main advantage of trading using opposite Ningbo Construction and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Western Metal 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 Western Metal will offset losses from the drop in Western Metal's long position.| Ningbo Construction vs. Agricultural Bank of | Ningbo Construction vs. Industrial and Commercial | Ningbo Construction vs. Bank of China | Ningbo Construction vs. PetroChina Co Ltd |
| Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal vs. Rongsheng Petrochemical Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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