Correlation Between Nancal Energy and Ningxia Building
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By analyzing existing cross correlation between Nancal Energy Saving Tech and Ningxia Building Materials, you can compare the effects of market volatilities on Nancal Energy and Ningxia Building 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 Nancal Energy with a short position of Ningxia Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nancal Energy and Ningxia Building.
Diversification Opportunities for Nancal Energy and Ningxia Building
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nancal and Ningxia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Nancal Energy Saving Tech and Ningxia Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Building Mat and Nancal Energy 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 Nancal Energy Saving Tech are associated (or correlated) with Ningxia Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Building Mat has no effect on the direction of Nancal Energy i.e., Nancal Energy and Ningxia Building go up and down completely randomly.
Pair Corralation between Nancal Energy and Ningxia Building
Assuming the 90 days trading horizon Nancal Energy Saving Tech is expected to generate 1.95 times more return on investment than Ningxia Building. However, Nancal Energy is 1.95 times more volatile than Ningxia Building Materials. It trades about 0.39 of its potential returns per unit of risk. Ningxia Building Materials is currently generating about 0.03 per unit of risk. If you would invest 1,976 in Nancal Energy Saving Tech on August 24, 2024 and sell it today you would earn a total of 1,220 from holding Nancal Energy Saving Tech or generate 61.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nancal Energy Saving Tech vs. Ningxia Building Materials
Performance |
| Timeline |
| Nancal Energy Saving |
| Ningxia Building Mat |
Nancal Energy and Ningxia Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nancal Energy and Ningxia Building
The main advantage of trading using opposite Nancal Energy and Ningxia Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nancal Energy position performs unexpectedly, Ningxia Building 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 Ningxia Building will offset losses from the drop in Ningxia Building's long position.| Nancal Energy vs. Chengdu Kanghua Biological | Nancal Energy vs. Beijing Wantai Biological | Nancal Energy vs. Suzhou Novoprotein Scientific | Nancal Energy vs. Aluminum Corp of |
| Ningxia Building vs. Zijin Mining Group | Ningxia Building vs. Wanhua Chemical Group | Ningxia Building vs. Baoshan Iron Steel | Ningxia Building vs. Rongsheng Petrochemical Co |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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