Correlation Between Shanghai Shuixing and Ningbo Homelink
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By analyzing existing cross correlation between Shanghai Shuixing Home and Ningbo Homelink Eco iTech, you can compare the effects of market volatilities on Shanghai Shuixing and Ningbo Homelink 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 Shanghai Shuixing with a short position of Ningbo Homelink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Ningbo Homelink.
Diversification Opportunities for Shanghai Shuixing and Ningbo Homelink
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Ningbo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Ningbo Homelink Eco iTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Homelink Eco and Shanghai Shuixing 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 Shanghai Shuixing Home are associated (or correlated) with Ningbo Homelink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Homelink Eco has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Ningbo Homelink go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Ningbo Homelink
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 0.82 times more return on investment than Ningbo Homelink. However, Shanghai Shuixing Home is 1.22 times less risky than Ningbo Homelink. It trades about 0.02 of its potential returns per unit of risk. Ningbo Homelink Eco iTech is currently generating about -0.01 per unit of risk. If you would invest 1,319 in Shanghai Shuixing Home on October 27, 2024 and sell it today you would earn a total of 183.00 from holding Shanghai Shuixing Home or generate 13.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Ningbo Homelink Eco iTech
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Ningbo Homelink Eco |
Shanghai Shuixing and Ningbo Homelink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Ningbo Homelink
The main advantage of trading using opposite Shanghai Shuixing and Ningbo Homelink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Ningbo Homelink 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 Homelink will offset losses from the drop in Ningbo Homelink's long position.| Shanghai Shuixing vs. Sportsoul Co Ltd | Shanghai Shuixing vs. Keda Clean Energy | Shanghai Shuixing vs. Luyin Investment Group | Shanghai Shuixing vs. Xiandai Investment Co |
| Ningbo Homelink vs. Nanxing Furniture Machinery | Ningbo Homelink vs. Great Sun Foods Co | Ningbo Homelink vs. Anhui Huilong Agricultural | Ningbo Homelink vs. Linzhou Heavy Machinery |
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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