Correlation Between Ningbo Construction and Huitong Construction
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By analyzing existing cross correlation between Ningbo Construction Co and Huitong Construction Group, you can compare the effects of market volatilities on Ningbo Construction and Huitong 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 Huitong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Huitong Construction.
Diversification Opportunities for Ningbo Construction and Huitong Construction
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Huitong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Huitong Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huitong 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 Huitong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huitong Construction has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Huitong Construction go up and down completely randomly.
Pair Corralation between Ningbo Construction and Huitong Construction
Assuming the 90 days trading horizon Ningbo Construction Co is expected to generate 1.85 times more return on investment than Huitong Construction. However, Ningbo Construction is 1.85 times more volatile than Huitong Construction Group. It trades about 0.09 of its potential returns per unit of risk. Huitong Construction Group is currently generating about 0.05 per unit of risk. If you would invest 428.00 in Ningbo Construction Co on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Ningbo Construction Co or generate 7.01% 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. Huitong Construction Group
Performance |
| Timeline |
| Ningbo Construction |
| Huitong Construction |
Ningbo Construction and Huitong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Huitong Construction
The main advantage of trading using opposite Ningbo Construction and Huitong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Huitong 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 Huitong Construction will offset losses from the drop in Huitong Construction's long position.| Ningbo Construction vs. Ming Yang Smart | Ningbo Construction vs. 159681 | Ningbo Construction vs. 159005 | Ningbo Construction vs. Loctek Ergonomic Technology |
| Huitong Construction vs. Ming Yang Smart | Huitong Construction vs. 159681 | Huitong Construction vs. 159005 | Huitong Construction vs. Loctek Ergonomic Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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