Correlation Between Ningbo Tip and Fuda Alloy
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By analyzing existing cross correlation between Ningbo Tip Rubber and Fuda Alloy Materials, you can compare the effects of market volatilities on Ningbo Tip and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tip and Fuda Alloy.
Diversification Opportunities for Ningbo Tip and Fuda Alloy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Fuda is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tip Rubber and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of Ningbo Tip i.e., Ningbo Tip and Fuda Alloy go up and down completely randomly.
Pair Corralation between Ningbo Tip and Fuda Alloy
Assuming the 90 days trading horizon Ningbo Tip is expected to generate 1.41 times less return on investment than Fuda Alloy. In addition to that, Ningbo Tip is 1.17 times more volatile than Fuda Alloy Materials. It trades about 0.05 of its total potential returns per unit of risk. Fuda Alloy Materials is currently generating about 0.07 per unit of volatility. If you would invest 1,060 in Fuda Alloy Materials on November 28, 2024 and sell it today you would earn a total of 381.00 from holding Fuda Alloy Materials or generate 35.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Tip Rubber vs. Fuda Alloy Materials
Performance |
| Timeline |
| Ningbo Tip Rubber |
| Fuda Alloy Materials |
Ningbo Tip and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Tip and Fuda Alloy
The main advantage of trading using opposite Ningbo Tip and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Tip position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy's long position.| Ningbo Tip vs. New China Life | Ningbo Tip vs. Ming Yang Smart | Ningbo Tip vs. 159681 | Ningbo Tip vs. 159005 |
| Fuda Alloy vs. Thinkingdom Media Group | Fuda Alloy vs. Jilin Jlu Communication | Fuda Alloy vs. BizConf Telecom Co | Fuda Alloy vs. Mega info Media CoLtd |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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