Correlation Between Fuda Alloy and Ningbo Tip
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By analyzing existing cross correlation between Fuda Alloy Materials and Ningbo Tip Rubber, you can compare the effects of market volatilities on Fuda Alloy and Ningbo Tip 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 Fuda Alloy with a short position of Ningbo Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuda Alloy and Ningbo Tip.
Diversification Opportunities for Fuda Alloy and Ningbo Tip
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fuda and Ningbo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fuda Alloy Materials and Ningbo Tip Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tip Rubber and Fuda Alloy 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 Fuda Alloy Materials are associated (or correlated) with Ningbo Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tip Rubber has no effect on the direction of Fuda Alloy i.e., Fuda Alloy and Ningbo Tip go up and down completely randomly.
Pair Corralation between Fuda Alloy and Ningbo Tip
Assuming the 90 days trading horizon Fuda Alloy Materials is expected to under-perform the Ningbo Tip. But the stock apears to be less risky and, when comparing its historical volatility, Fuda Alloy Materials is 1.19 times less risky than Ningbo Tip. The stock trades about -0.04 of its potential returns per unit of risk. The Ningbo Tip Rubber is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,286 in Ningbo Tip Rubber on September 1, 2024 and sell it today you would earn a total of 107.00 from holding Ningbo Tip Rubber or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuda Alloy Materials vs. Ningbo Tip Rubber
Performance |
| Timeline |
| Fuda Alloy Materials |
| Ningbo Tip Rubber |
Fuda Alloy and Ningbo Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuda Alloy and Ningbo Tip
The main advantage of trading using opposite Fuda Alloy and Ningbo Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuda Alloy position performs unexpectedly, Ningbo Tip 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 Ningbo Tip will offset losses from the drop in Ningbo Tip's long position.| Fuda Alloy vs. Cultural Investment Holdings | Fuda Alloy vs. Gome Telecom Equipment | Fuda Alloy vs. Bus Online Co | Fuda Alloy vs. Holitech Technology Co |
| Ningbo Tip vs. Jinhui Liquor Co | Ningbo Tip vs. Yunnan Xiyi Industrial | Ningbo Tip vs. Western Metal Materials | Ningbo Tip vs. Shenzhen Shenbao Industrial |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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