Correlation Between Ningbo Construction and Eastroc Beverage
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By analyzing existing cross correlation between Ningbo Construction Co and Eastroc Beverage Group, you can compare the effects of market volatilities on Ningbo Construction and Eastroc Beverage 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 Eastroc Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Eastroc Beverage.
Diversification Opportunities for Ningbo Construction and Eastroc Beverage
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Eastroc is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Eastroc Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastroc Beverage 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 Eastroc Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastroc Beverage has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Eastroc Beverage go up and down completely randomly.
Pair Corralation between Ningbo Construction and Eastroc Beverage
Assuming the 90 days trading horizon Ningbo Construction is expected to generate 1.91 times less return on investment than Eastroc Beverage. In addition to that, Ningbo Construction is 1.29 times more volatile than Eastroc Beverage Group. It trades about 0.02 of its total potential returns per unit of risk. Eastroc Beverage Group is currently generating about 0.06 per unit of volatility. If you would invest 13,577 in Eastroc Beverage Group on September 4, 2024 and sell it today you would earn a total of 8,263 from holding Eastroc Beverage Group or generate 60.86% 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. Eastroc Beverage Group
Performance |
| Timeline |
| Ningbo Construction |
| Eastroc Beverage |
Ningbo Construction and Eastroc Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Eastroc Beverage
The main advantage of trading using opposite Ningbo Construction and Eastroc Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Eastroc Beverage 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 Eastroc Beverage will offset losses from the drop in Eastroc Beverage'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 |
| Eastroc Beverage vs. Shaanxi Energy Investment | Eastroc Beverage vs. China Express Airlines | Eastroc Beverage vs. Wuhan Hvsen Biotechnology | Eastroc Beverage vs. Ningbo MedicalSystem Biotechnology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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