Correlation Between Ningbo Construction and Humanwell Healthcare
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By analyzing existing cross correlation between Ningbo Construction Co and Humanwell Healthcare Group, you can compare the effects of market volatilities on Ningbo Construction and Humanwell Healthcare 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 Humanwell Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Humanwell Healthcare.
Diversification Opportunities for Ningbo Construction and Humanwell Healthcare
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Humanwell is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Humanwell Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humanwell Healthcare 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 Humanwell Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humanwell Healthcare has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Humanwell Healthcare go up and down completely randomly.
Pair Corralation between Ningbo Construction and Humanwell Healthcare
Assuming the 90 days trading horizon Ningbo Construction Co is expected to generate 0.65 times more return on investment than Humanwell Healthcare. However, Ningbo Construction Co is 1.55 times less risky than Humanwell Healthcare. It trades about 0.09 of its potential returns per unit of risk. Humanwell Healthcare Group is currently generating about 0.05 per unit of risk. If you would invest 410.00 in Ningbo Construction Co on November 7, 2024 and sell it today you would earn a total of 9.00 from holding Ningbo Construction Co or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Construction Co vs. Humanwell Healthcare Group
Performance |
| Timeline |
| Ningbo Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Humanwell Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Ningbo Construction and Humanwell Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Humanwell Healthcare
The main advantage of trading using opposite Ningbo Construction and Humanwell Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Humanwell Healthcare 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 Humanwell Healthcare will offset losses from the drop in Humanwell Healthcare's long position.The idea behind Ningbo Construction Co and Humanwell Healthcare Group 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.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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