Correlation Between Ningbo Tip and Guangzhou Shiyuan
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By analyzing existing cross correlation between Ningbo Tip Rubber and Guangzhou Shiyuan Electronic, you can compare the effects of market volatilities on Ningbo Tip and Guangzhou Shiyuan 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 Guangzhou Shiyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tip and Guangzhou Shiyuan.
Diversification Opportunities for Ningbo Tip and Guangzhou Shiyuan
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Guangzhou is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tip Rubber and Guangzhou Shiyuan Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Shiyuan 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 Guangzhou Shiyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Shiyuan has no effect on the direction of Ningbo Tip i.e., Ningbo Tip and Guangzhou Shiyuan go up and down completely randomly.
Pair Corralation between Ningbo Tip and Guangzhou Shiyuan
Assuming the 90 days trading horizon Ningbo Tip Rubber is expected to generate 1.01 times more return on investment than Guangzhou Shiyuan. However, Ningbo Tip is 1.01 times more volatile than Guangzhou Shiyuan Electronic. It trades about 0.09 of its potential returns per unit of risk. Guangzhou Shiyuan Electronic is currently generating about 0.05 per unit of risk. If you would invest 1,062 in Ningbo Tip Rubber on November 2, 2024 and sell it today you would earn a total of 244.00 from holding Ningbo Tip Rubber or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tip Rubber vs. Guangzhou Shiyuan Electronic
Performance |
| Timeline |
| Ningbo Tip Rubber |
| Guangzhou Shiyuan |
Ningbo Tip and Guangzhou Shiyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tip and Guangzhou Shiyuan
The main advantage of trading using opposite Ningbo Tip and Guangzhou Shiyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tip position performs unexpectedly, Guangzhou Shiyuan 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 Guangzhou Shiyuan will offset losses from the drop in Guangzhou Shiyuan's long position.| Ningbo Tip vs. Kweichow Moutai Co | Ningbo Tip vs. Jiangsu Pacific Quartz | Ningbo Tip vs. Shenzhen Transsion Holdings | Ningbo Tip vs. Beijing Roborock Technology |
| Guangzhou Shiyuan vs. YiDong Electronics Technology | Guangzhou Shiyuan vs. Shenzhen Clou Electronics | Guangzhou Shiyuan vs. Xizi Clean Energy | Guangzhou Shiyuan vs. Semiconductor Manufacturing Electronics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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