Correlation Between Ningbo Construction and Cambricon Technologies
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By analyzing existing cross correlation between Ningbo Construction Co and Cambricon Technologies Corp, you can compare the effects of market volatilities on Ningbo Construction and Cambricon Technologies 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 Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Cambricon Technologies.
Diversification Opportunities for Ningbo Construction and Cambricon Technologies
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Cambricon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies 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 Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Ningbo Construction and Cambricon Technologies
Assuming the 90 days trading horizon Ningbo Construction is expected to generate 9.91 times less return on investment than Cambricon Technologies. But when comparing it to its historical volatility, Ningbo Construction Co is 2.06 times less risky than Cambricon Technologies. It trades about 0.02 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 22,021 in Cambricon Technologies Corp on September 4, 2024 and sell it today you would earn a total of 34,179 from holding Cambricon Technologies Corp or generate 155.21% 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. Cambricon Technologies Corp
Performance |
| Timeline |
| Ningbo Construction |
| Cambricon Technologies |
Ningbo Construction and Cambricon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Construction and Cambricon Technologies
The main advantage of trading using opposite Ningbo Construction and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' 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 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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