Correlation Between Ningbo Tip and Sinomach Automobile
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By analyzing existing cross correlation between Ningbo Tip Rubber and Sinomach Automobile Co, you can compare the effects of market volatilities on Ningbo Tip and Sinomach Automobile 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 Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tip and Sinomach Automobile.
Diversification Opportunities for Ningbo Tip and Sinomach Automobile
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Sinomach is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tip Rubber and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile 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 Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of Ningbo Tip i.e., Ningbo Tip and Sinomach Automobile go up and down completely randomly.
Pair Corralation between Ningbo Tip and Sinomach Automobile
Assuming the 90 days trading horizon Ningbo Tip Rubber is expected to generate 1.02 times more return on investment than Sinomach Automobile. However, Ningbo Tip is 1.02 times more volatile than Sinomach Automobile Co. It trades about 0.0 of its potential returns per unit of risk. Sinomach Automobile Co is currently generating about -0.02 per unit of risk. If you would invest 1,470 in Ningbo Tip Rubber on October 16, 2024 and sell it today you would lose (278.00) from holding Ningbo Tip Rubber or give up 18.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tip Rubber vs. Sinomach Automobile Co
Performance |
| Timeline |
| Ningbo Tip Rubber |
| Sinomach Automobile |
Ningbo Tip and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tip and Sinomach Automobile
The main advantage of trading using opposite Ningbo Tip and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tip position performs unexpectedly, Sinomach Automobile 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.| Ningbo Tip vs. Guangzhou Tinci Materials | Ningbo Tip vs. Orinko Advanced Plastics | Ningbo Tip vs. Kunwu Jiuding Investment | Ningbo Tip vs. Advanced Technology Materials |
| Sinomach Automobile vs. Ningbo Tip Rubber | Sinomach Automobile vs. China Asset Management | Sinomach Automobile vs. Nuode Investment Co | Sinomach Automobile vs. Jinsanjiang Silicon Material |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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