Correlation Between Hainan Haiqi and Ningbo Construction
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Ningbo Construction Co, you can compare the effects of market volatilities on Hainan Haiqi and Ningbo 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 Hainan Haiqi with a short position of Ningbo Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Ningbo Construction.
Diversification Opportunities for Hainan Haiqi and Ningbo Construction
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Ningbo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction and Hainan Haiqi 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 Hainan Haiqi Transportation are associated (or correlated) with Ningbo Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Hainan Haiqi i.e., Hainan Haiqi and Ningbo Construction go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Ningbo Construction
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to under-perform the Ningbo Construction. But the stock apears to be less risky and, when comparing its historical volatility, Hainan Haiqi Transportation is 1.38 times less risky than Ningbo Construction. The stock trades about -0.03 of its potential returns per unit of risk. The Ningbo Construction Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. 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 |
Hainan Haiqi Transportation vs. Ningbo Construction Co
Performance |
| Timeline |
| Hainan Haiqi Transpo |
| Ningbo Construction |
Hainan Haiqi and Ningbo Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Ningbo Construction
The main advantage of trading using opposite Hainan Haiqi and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi position performs unexpectedly, Ningbo 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 Ningbo Construction will offset losses from the drop in Ningbo Construction's long position.| Hainan Haiqi vs. Cambricon Technologies Corp | Hainan Haiqi vs. Loongson Technology Corp | Hainan Haiqi vs. Chongqing Road Bridge | Hainan Haiqi vs. Shenzhen Fortune Trend |
| Ningbo Construction vs. Ming Yang Smart | Ningbo Construction vs. 159681 | Ningbo Construction vs. 159005 | Ningbo 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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