Correlation Between EmbedWay TechCorp and Ningbo Boway
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By analyzing existing cross correlation between EmbedWay TechCorp and Ningbo Boway Alloy, you can compare the effects of market volatilities on EmbedWay TechCorp and Ningbo Boway 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 EmbedWay TechCorp with a short position of Ningbo Boway. Check out your portfolio center. Please also check ongoing floating volatility patterns of EmbedWay TechCorp and Ningbo Boway.
Diversification Opportunities for EmbedWay TechCorp and Ningbo Boway
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EmbedWay and Ningbo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding EmbedWay TechCorp and Ningbo Boway Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Boway Alloy and EmbedWay TechCorp 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 EmbedWay TechCorp are associated (or correlated) with Ningbo Boway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Boway Alloy has no effect on the direction of EmbedWay TechCorp i.e., EmbedWay TechCorp and Ningbo Boway go up and down completely randomly.
Pair Corralation between EmbedWay TechCorp and Ningbo Boway
Assuming the 90 days trading horizon EmbedWay TechCorp is expected to generate 10.81 times less return on investment than Ningbo Boway. In addition to that, EmbedWay TechCorp is 1.21 times more volatile than Ningbo Boway Alloy. It trades about 0.01 of its total potential returns per unit of risk. Ningbo Boway Alloy is currently generating about 0.11 per unit of volatility. If you would invest 1,819 in Ningbo Boway Alloy on September 27, 2024 and sell it today you would earn a total of 68.00 from holding Ningbo Boway Alloy or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
EmbedWay TechCorp vs. Ningbo Boway Alloy
Performance |
| Timeline |
| EmbedWay TechCorp |
| Ningbo Boway Alloy |
EmbedWay TechCorp and Ningbo Boway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EmbedWay TechCorp and Ningbo Boway
The main advantage of trading using opposite EmbedWay TechCorp and Ningbo Boway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EmbedWay TechCorp position performs unexpectedly, Ningbo Boway 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 Boway will offset losses from the drop in Ningbo Boway's long position.| EmbedWay TechCorp vs. Industrial and Commercial | EmbedWay TechCorp vs. Agricultural Bank of | EmbedWay TechCorp vs. China Construction Bank | EmbedWay TechCorp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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