Correlation Between Ningbo Tip and Western Metal
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By analyzing existing cross correlation between Ningbo Tip Rubber and Western Metal Materials, you can compare the effects of market volatilities on Ningbo Tip and Western Metal 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 Tip with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tip and Western Metal.
Diversification Opportunities for Ningbo Tip and Western Metal
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ningbo and Western is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tip Rubber and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials and Ningbo Tip 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 Tip Rubber are associated (or correlated) with Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Ningbo Tip i.e., Ningbo Tip and Western Metal go up and down completely randomly.
Pair Corralation between Ningbo Tip and Western Metal
Assuming the 90 days trading horizon Ningbo Tip is expected to generate 1.91 times less return on investment than Western Metal. In addition to that, Ningbo Tip is 1.01 times more volatile than Western Metal Materials. It trades about 0.05 of its total potential returns per unit of risk. Western Metal Materials is currently generating about 0.09 per unit of volatility. If you would invest 1,293 in Western Metal Materials on November 3, 2024 and sell it today you would earn a total of 407.00 from holding Western Metal Materials or generate 31.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tip Rubber vs. Western Metal Materials
Performance |
| Timeline |
| Ningbo Tip Rubber |
| Western Metal Materials |
Ningbo Tip and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tip and Western Metal
The main advantage of trading using opposite Ningbo Tip and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tip position performs unexpectedly, Western Metal 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 Western Metal will offset losses from the drop in Western Metal's long position.| Ningbo Tip vs. China Life Insurance | Ningbo Tip vs. National Silicon Industry | Ningbo Tip vs. Shanghai OPM Biosciences | Ningbo Tip vs. Nanhua Bio Medicine |
| Western Metal vs. Kingclean Electric Co | Western Metal vs. Hangzhou Zhongya Machinery | Western Metal vs. Guangzhou KDT Machinery | Western Metal vs. Masterwork 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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