Correlation Between Xingguang Agricultural and Ningbo Construction
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By analyzing existing cross correlation between Xingguang Agricultural Mach and Ningbo Construction Co, you can compare the effects of market volatilities on Xingguang Agricultural and Ningbo Construction 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 Xingguang Agricultural with a short position of Ningbo Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xingguang Agricultural and Ningbo Construction.
Diversification Opportunities for Xingguang Agricultural and Ningbo Construction
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xingguang and Ningbo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Xingguang Agricultural Mach and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction and Xingguang Agricultural 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 Xingguang Agricultural Mach are associated (or correlated) with Ningbo Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Xingguang Agricultural i.e., Xingguang Agricultural and Ningbo Construction go up and down completely randomly.
Pair Corralation between Xingguang Agricultural and Ningbo Construction
Assuming the 90 days trading horizon Xingguang Agricultural is expected to generate 1.25 times less return on investment than Ningbo Construction. But when comparing it to its historical volatility, Xingguang Agricultural Mach is 1.13 times less risky than Ningbo Construction. It trades about 0.17 of its potential returns per unit of risk. Ningbo Construction Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 365.00 in Ningbo Construction Co on August 27, 2024 and sell it today you would earn a total of 112.00 from holding Ningbo Construction Co or generate 30.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xingguang Agricultural Mach vs. Ningbo Construction Co
Performance |
| Timeline |
| Xingguang Agricultural |
| Ningbo Construction |
Xingguang Agricultural and Ningbo Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xingguang Agricultural and Ningbo Construction
The main advantage of trading using opposite Xingguang Agricultural and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xingguang Agricultural position performs unexpectedly, Ningbo Construction 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 Construction will offset losses from the drop in Ningbo Construction's long position.| Xingguang Agricultural vs. Arrow Home Group | Xingguang Agricultural vs. Weichai Heavy Machinery | Xingguang Agricultural vs. MayAir Technology Co | Xingguang Agricultural vs. Harbin Air Conditioning |
| Ningbo Construction vs. Songz Automobile Air | Ningbo Construction vs. Guangzhou Haige Communications | Ningbo Construction vs. HaiXin Foods Co | Ningbo Construction vs. New Hope Dairy |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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