Correlation Between Ningbo Tip and Zhejiang Construction
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By analyzing existing cross correlation between Ningbo Tip Rubber and Zhejiang Construction Investment, you can compare the effects of market volatilities on Ningbo Tip and Zhejiang 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 Ningbo Tip with a short position of Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tip and Zhejiang Construction.
Diversification Opportunities for Ningbo Tip and Zhejiang Construction
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Zhejiang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tip Rubber and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Ningbo Tip i.e., Ningbo Tip and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Ningbo Tip and Zhejiang Construction
Assuming the 90 days trading horizon Ningbo Tip is expected to generate 1.29 times less return on investment than Zhejiang Construction. But when comparing it to its historical volatility, Ningbo Tip Rubber is 1.68 times less risky than Zhejiang Construction. It trades about 0.16 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 906.00 in Zhejiang Construction Investment on September 3, 2024 and sell it today you would earn a total of 95.00 from holding Zhejiang Construction Investment or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ningbo Tip Rubber vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Ningbo Tip Rubber |
| Zhejiang Construction |
Ningbo Tip and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tip and Zhejiang Construction
The main advantage of trading using opposite Ningbo Tip and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tip position performs unexpectedly, Zhejiang 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction's long position.| Ningbo Tip vs. PetroChina Co Ltd | Ningbo Tip vs. China Mobile Limited | Ningbo Tip vs. Industrial and Commercial | Ningbo Tip vs. China Life Insurance |
| Zhejiang Construction vs. Chengdu Spaceon Electronics | Zhejiang Construction vs. Anhui Gujing Distillery | Zhejiang Construction vs. Western Metal Materials | Zhejiang Construction vs. China Asset Management |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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