Correlation Between Zhongyin Babi and Ningbo Fangzheng
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By analyzing existing cross correlation between Zhongyin Babi Food and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Zhongyin Babi and Ningbo Fangzheng 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 Zhongyin Babi with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongyin Babi and Ningbo Fangzheng.
Diversification Opportunities for Zhongyin Babi and Ningbo Fangzheng
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongyin and Ningbo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Zhongyin Babi Food and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and Zhongyin Babi 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 Zhongyin Babi Food are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Zhongyin Babi i.e., Zhongyin Babi and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Zhongyin Babi and Ningbo Fangzheng
Assuming the 90 days trading horizon Zhongyin Babi Food is expected to generate 0.65 times more return on investment than Ningbo Fangzheng. However, Zhongyin Babi Food is 1.55 times less risky than Ningbo Fangzheng. It trades about -0.12 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.12 per unit of risk. If you would invest 1,775 in Zhongyin Babi Food on October 24, 2024 and sell it today you would lose (86.00) from holding Zhongyin Babi Food or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongyin Babi Food vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Zhongyin Babi Food |
| Ningbo Fangzheng Aut |
Zhongyin Babi and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongyin Babi and Ningbo Fangzheng
The main advantage of trading using opposite Zhongyin Babi and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongyin Babi position performs unexpectedly, Ningbo Fangzheng 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 Ningbo Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Zhongyin Babi vs. Zhejiang Construction Investment | Zhongyin Babi vs. Duzhe Publishing Media | Zhongyin Babi vs. Hunan Investment Group | Zhongyin Babi vs. Tieling Newcity Investment |
| Ningbo Fangzheng vs. Shanghai Action Education | Ningbo Fangzheng vs. Digiwin Software Co | Ningbo Fangzheng vs. Tangel Publishing | Ningbo Fangzheng vs. HanS Laser Tech |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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