Correlation Between Ningbo Construction and Tengda Construction
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By analyzing existing cross correlation between Ningbo Construction Co and Tengda Construction Group, you can compare the effects of market volatilities on Ningbo Construction and Tengda Construction 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 Tengda Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Tengda Construction.
Diversification Opportunities for Ningbo Construction and Tengda Construction
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningbo and Tengda is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Tengda Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tengda Construction 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 Tengda Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tengda Construction has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Tengda Construction go up and down completely randomly.
Pair Corralation between Ningbo Construction and Tengda Construction
Assuming the 90 days trading horizon Ningbo Construction Co is expected to generate 1.45 times more return on investment than Tengda Construction. However, Ningbo Construction is 1.45 times more volatile than Tengda Construction Group. It trades about 0.02 of its potential returns per unit of risk. Tengda Construction Group is currently generating about 0.0 per unit of risk. If you would invest 438.00 in Ningbo Construction Co on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Ningbo Construction Co or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Construction Co vs. Tengda Construction Group
Performance |
| Timeline |
| Ningbo Construction |
| Tengda Construction |
Ningbo Construction and Tengda Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Tengda Construction
The main advantage of trading using opposite Ningbo Construction and Tengda Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Tengda Construction 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 Tengda Construction will offset losses from the drop in Tengda Construction'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 |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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