Correlation Between Ningbo Tip and Zhejiang Century
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By analyzing existing cross correlation between Ningbo Tip Rubber and Zhejiang Century Huatong, you can compare the effects of market volatilities on Ningbo Tip and Zhejiang Century 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 Zhejiang Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tip and Zhejiang Century.
Diversification Opportunities for Ningbo Tip and Zhejiang Century
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and Zhejiang is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tip Rubber and Zhejiang Century Huatong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Century Huatong 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 Zhejiang Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Century Huatong has no effect on the direction of Ningbo Tip i.e., Ningbo Tip and Zhejiang Century go up and down completely randomly.
Pair Corralation between Ningbo Tip and Zhejiang Century
Assuming the 90 days trading horizon Ningbo Tip Rubber is expected to generate 1.19 times more return on investment than Zhejiang Century. However, Ningbo Tip is 1.19 times more volatile than Zhejiang Century Huatong. It trades about 0.01 of its potential returns per unit of risk. Zhejiang Century Huatong is currently generating about -0.02 per unit of risk. If you would invest 1,576 in Ningbo Tip Rubber on September 12, 2024 and sell it today you would lose (166.00) from holding Ningbo Tip Rubber or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tip Rubber vs. Zhejiang Century Huatong
Performance |
| Timeline |
| Ningbo Tip Rubber |
| Zhejiang Century Huatong |
Ningbo Tip and Zhejiang Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tip and Zhejiang Century
The main advantage of trading using opposite Ningbo Tip and Zhejiang Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tip position performs unexpectedly, Zhejiang Century 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 Zhejiang Century will offset losses from the drop in Zhejiang Century's long position.| Ningbo Tip vs. Lutian Machinery Co | Ningbo Tip vs. PetroChina Co Ltd | Ningbo Tip vs. Bank of China | Ningbo Tip vs. Gansu Jiu Steel |
| Zhejiang Century vs. StarPower Semiconductor | Zhejiang Century vs. Ningbo Tip Rubber | Zhejiang Century vs. Tianjin Pengling Rubber | Zhejiang Century vs. Heilongjiang Transport Development |
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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