Correlation Between Ningbo Fujia and Shandong Hongchuang
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By analyzing existing cross correlation between Ningbo Fujia Industrial and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Ningbo Fujia and Shandong Hongchuang 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 Fujia with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fujia and Shandong Hongchuang.
Diversification Opportunities for Ningbo Fujia and Shandong Hongchuang
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Shandong is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fujia Industrial and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Ningbo Fujia 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 Fujia Industrial are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Ningbo Fujia i.e., Ningbo Fujia and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Ningbo Fujia and Shandong Hongchuang
Assuming the 90 days trading horizon Ningbo Fujia is expected to generate 4.44 times less return on investment than Shandong Hongchuang. But when comparing it to its historical volatility, Ningbo Fujia Industrial is 1.31 times less risky than Shandong Hongchuang. It trades about 0.06 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 897.00 in Shandong Hongchuang Aluminum on November 3, 2024 and sell it today you would earn a total of 144.00 from holding Shandong Hongchuang Aluminum or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ningbo Fujia Industrial vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Ningbo Fujia Industrial |
| Shandong Hongchuang |
Ningbo Fujia and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fujia and Shandong Hongchuang
The main advantage of trading using opposite Ningbo Fujia and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fujia position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Ningbo Fujia vs. Western Metal Materials | Ningbo Fujia vs. Capitalonline Data Service | Ningbo Fujia vs. Tibet Huayu Mining | Ningbo Fujia vs. Bohai Leasing Co |
| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Shandong Gold Mining |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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