Correlation Between Ningbo Construction and Allied Machinery
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By analyzing existing cross correlation between Ningbo Construction Co and Allied Machinery Co, you can compare the effects of market volatilities on Ningbo Construction and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Allied Machinery.
Diversification Opportunities for Ningbo Construction and Allied Machinery
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningbo and Allied is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Allied Machinery go up and down completely randomly.
Pair Corralation between Ningbo Construction and Allied Machinery
Assuming the 90 days trading horizon Ningbo Construction Co is expected to generate 1.34 times more return on investment than Allied Machinery. However, Ningbo Construction is 1.34 times more volatile than Allied Machinery Co. It trades about 0.14 of its potential returns per unit of risk. Allied Machinery Co is currently generating about 0.17 per unit of risk. If you would invest 376.00 in Ningbo Construction Co on August 28, 2024 and sell it today you would earn a total of 82.00 from holding Ningbo Construction Co or generate 21.81% 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. Allied Machinery Co
Performance |
| Timeline |
| Ningbo Construction |
| Allied Machinery |
Ningbo Construction and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Allied Machinery
The main advantage of trading using opposite Ningbo Construction and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| Ningbo Construction vs. Ming Yang Smart | Ningbo Construction vs. 159681 | Ningbo Construction vs. 159005 | Ningbo Construction vs. Loctek Ergonomic Technology |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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