Correlation Between Sichuan Hebang and Ningbo Ligong
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Ningbo Ligong Online, you can compare the effects of market volatilities on Sichuan Hebang and Ningbo Ligong 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 Sichuan Hebang with a short position of Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Ningbo Ligong.
Diversification Opportunities for Sichuan Hebang and Ningbo Ligong
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sichuan and Ningbo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online and Sichuan Hebang 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 Sichuan Hebang Biotechnology are associated (or correlated) with Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Ningbo Ligong go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Ningbo Ligong
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to under-perform the Ningbo Ligong. In addition to that, Sichuan Hebang is 1.19 times more volatile than Ningbo Ligong Online. It trades about -0.37 of its total potential returns per unit of risk. Ningbo Ligong Online is currently generating about -0.43 per unit of volatility. If you would invest 1,359 in Ningbo Ligong Online on October 11, 2024 and sell it today you would lose (175.00) from holding Ningbo Ligong Online or give up 12.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Ningbo Ligong Online
Performance |
| Timeline |
| Sichuan Hebang Biote |
| Ningbo Ligong Online |
Sichuan Hebang and Ningbo Ligong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Hebang and Ningbo Ligong
The main advantage of trading using opposite Sichuan Hebang and Ningbo Ligong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Ningbo Ligong 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 Ligong will offset losses from the drop in Ningbo Ligong's long position.| Sichuan Hebang vs. Sichuan Fulin Transportation | Sichuan Hebang vs. Dazhong Transportation Group | Sichuan Hebang vs. Anhui Transport Consulting | Sichuan Hebang vs. Shanghai Broadband Technology |
| Ningbo Ligong vs. Advanced Technology Materials | Ningbo Ligong vs. Jilin OLED Material | Ningbo Ligong vs. Tongyu Communication | Ningbo Ligong vs. Jiangxi Hengda Hi Tech |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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