Correlation Between Ningbo Construction and Shandong Mining
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By analyzing existing cross correlation between Ningbo Construction Co and Shandong Mining Machinery, you can compare the effects of market volatilities on Ningbo Construction and Shandong Mining 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 Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Shandong Mining.
Diversification Opportunities for Ningbo Construction and Shandong Mining
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Shandong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery 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 Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Shandong Mining go up and down completely randomly.
Pair Corralation between Ningbo Construction and Shandong Mining
Assuming the 90 days trading horizon Ningbo Construction is expected to generate 2.42 times less return on investment than Shandong Mining. But when comparing it to its historical volatility, Ningbo Construction Co is 1.08 times less risky than Shandong Mining. It trades about 0.02 of its potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Shandong Mining Machinery on September 4, 2024 and sell it today you would earn a total of 166.00 from holding Shandong Mining Machinery or generate 72.17% 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. Shandong Mining Machinery
Performance |
| Timeline |
| Ningbo Construction |
| Shandong Mining Machinery |
Ningbo Construction and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Shandong Mining
The main advantage of trading using opposite Ningbo Construction and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Shandong Mining 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 Shandong Mining will offset losses from the drop in Shandong Mining's long position.| Ningbo Construction vs. China Life Insurance | Ningbo Construction vs. Cinda Securities Co | Ningbo Construction vs. Piotech Inc A | Ningbo Construction vs. Dongxing Sec Co |
| Shandong Mining vs. Xinjiang Communications Construction | Shandong Mining vs. Nanjing Putian Telecommunications | Shandong Mining vs. Jonjee Hi tech Industrial | Shandong Mining vs. Zoje Resources Investment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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