Correlation Between Ningbo Tip and Hubei Xingfa
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By analyzing existing cross correlation between Ningbo Tip Rubber and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Ningbo Tip and Hubei Xingfa 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 Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tip and Hubei Xingfa.
Diversification Opportunities for Ningbo Tip and Hubei Xingfa
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Hubei is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tip Rubber and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Ningbo Tip i.e., Ningbo Tip and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Ningbo Tip and Hubei Xingfa
Assuming the 90 days trading horizon Ningbo Tip Rubber is expected to under-perform the Hubei Xingfa. In addition to that, Ningbo Tip is 2.37 times more volatile than Hubei Xingfa Chemicals. It trades about -0.05 of its total potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about -0.03 per unit of volatility. If you would invest 2,232 in Hubei Xingfa Chemicals on October 20, 2024 and sell it today you would lose (29.00) from holding Hubei Xingfa Chemicals or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tip Rubber vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Ningbo Tip Rubber |
| Hubei Xingfa Chemicals |
Ningbo Tip and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tip and Hubei Xingfa
The main advantage of trading using opposite Ningbo Tip and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tip position performs unexpectedly, Hubei Xingfa 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 Hubei Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Ningbo Tip vs. Aba Chemicals Corp | Ningbo Tip vs. Hubei Xingfa Chemicals | Ningbo Tip vs. Shannon Semiconductor Technology | Ningbo Tip vs. Glodon Software Co |
| Hubei Xingfa vs. Lier Chemical Co | Hubei Xingfa vs. Milkyway Chemical Supply | Hubei Xingfa vs. CITIC Metal Co | Hubei Xingfa vs. Dosilicon 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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