Correlation Between Ningbo Construction and Hubei Forbon
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By analyzing existing cross correlation between Ningbo Construction Co and Hubei Forbon Technology, you can compare the effects of market volatilities on Ningbo Construction and Hubei Forbon 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 Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Hubei Forbon.
Diversification Opportunities for Ningbo Construction and Hubei Forbon
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Hubei is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology 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 Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Hubei Forbon go up and down completely randomly.
Pair Corralation between Ningbo Construction and Hubei Forbon
Assuming the 90 days trading horizon Ningbo Construction is expected to generate 1.57 times less return on investment than Hubei Forbon. But when comparing it to its historical volatility, Ningbo Construction Co is 1.11 times less risky than Hubei Forbon. It trades about 0.02 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 696.00 in Hubei Forbon Technology on August 25, 2024 and sell it today you would earn a total of 111.00 from holding Hubei Forbon Technology or generate 15.95% 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. Hubei Forbon Technology
Performance |
| Timeline |
| Ningbo Construction |
| Hubei Forbon Technology |
Ningbo Construction and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Hubei Forbon
The main advantage of trading using opposite Ningbo Construction and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon's long position.| Ningbo Construction vs. Duzhe Publishing Media | Ningbo Construction vs. Northern United Publishing | Ningbo Construction vs. Zhongyin Babi Food | Ningbo Construction vs. Sichuan Teway Food |
| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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