Correlation Between Ningbo Tip and HeBei Jinniu
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By analyzing existing cross correlation between Ningbo Tip Rubber and HeBei Jinniu Chemical, you can compare the effects of market volatilities on Ningbo Tip and HeBei Jinniu 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 HeBei Jinniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tip and HeBei Jinniu.
Diversification Opportunities for Ningbo Tip and HeBei Jinniu
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningbo and HeBei is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tip Rubber and HeBei Jinniu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeBei Jinniu Chemical 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 HeBei Jinniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeBei Jinniu Chemical has no effect on the direction of Ningbo Tip i.e., Ningbo Tip and HeBei Jinniu go up and down completely randomly.
Pair Corralation between Ningbo Tip and HeBei Jinniu
Assuming the 90 days trading horizon Ningbo Tip Rubber is expected to generate 1.0 times more return on investment than HeBei Jinniu. However, Ningbo Tip is 1.0 times more volatile than HeBei Jinniu Chemical. It trades about 0.16 of its potential returns per unit of risk. HeBei Jinniu Chemical is currently generating about 0.13 per unit of risk. If you would invest 1,268 in Ningbo Tip Rubber on August 31, 2024 and sell it today you would earn a total of 125.00 from holding Ningbo Tip Rubber or generate 9.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tip Rubber vs. HeBei Jinniu Chemical
Performance |
| Timeline |
| Ningbo Tip Rubber |
| HeBei Jinniu Chemical |
Ningbo Tip and HeBei Jinniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tip and HeBei Jinniu
The main advantage of trading using opposite Ningbo Tip and HeBei Jinniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tip position performs unexpectedly, HeBei Jinniu 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 HeBei Jinniu will offset losses from the drop in HeBei Jinniu's long position.| Ningbo Tip vs. China State Construction | Ningbo Tip vs. China Merchants Shekou | Ningbo Tip vs. Huafa Industrial Co | Ningbo Tip vs. China International Capital |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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