Correlation Between Senci Electric and Ningbo Fangzheng
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By analyzing existing cross correlation between Senci Electric Machinery and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Senci Electric and Ningbo Fangzheng 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 Senci Electric with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senci Electric and Ningbo Fangzheng.
Diversification Opportunities for Senci Electric and Ningbo Fangzheng
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senci and Ningbo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Senci Electric Machinery and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and Senci Electric 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 Senci Electric Machinery are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Senci Electric i.e., Senci Electric and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Senci Electric and Ningbo Fangzheng
Assuming the 90 days trading horizon Senci Electric Machinery is expected to generate 0.69 times more return on investment than Ningbo Fangzheng. However, Senci Electric Machinery is 1.44 times less risky than Ningbo Fangzheng. It trades about 0.1 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.03 per unit of risk. If you would invest 1,322 in Senci Electric Machinery on September 27, 2024 and sell it today you would earn a total of 411.00 from holding Senci Electric Machinery or generate 31.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senci Electric Machinery vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Senci Electric Machinery |
| Ningbo Fangzheng Aut |
Senci Electric and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senci Electric and Ningbo Fangzheng
The main advantage of trading using opposite Senci Electric and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senci Electric position performs unexpectedly, Ningbo Fangzheng 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 Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Senci Electric vs. Industrial and Commercial | Senci Electric vs. Agricultural Bank of | Senci Electric vs. China Construction Bank | Senci Electric vs. Bank of China |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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