Correlation Between Namchow Food and Zhongyin Babi
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By analyzing existing cross correlation between Namchow Food Group and Zhongyin Babi Food, you can compare the effects of market volatilities on Namchow Food and Zhongyin Babi 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 Namchow Food with a short position of Zhongyin Babi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namchow Food and Zhongyin Babi.
Diversification Opportunities for Namchow Food and Zhongyin Babi
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Namchow and Zhongyin is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Namchow Food Group and Zhongyin Babi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongyin Babi Food and Namchow Food 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 Namchow Food Group are associated (or correlated) with Zhongyin Babi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongyin Babi Food has no effect on the direction of Namchow Food i.e., Namchow Food and Zhongyin Babi go up and down completely randomly.
Pair Corralation between Namchow Food and Zhongyin Babi
Assuming the 90 days trading horizon Namchow Food Group is expected to under-perform the Zhongyin Babi. But the stock apears to be less risky and, when comparing its historical volatility, Namchow Food Group is 1.03 times less risky than Zhongyin Babi. The stock trades about -0.08 of its potential returns per unit of risk. The Zhongyin Babi Food is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,647 in Zhongyin Babi Food on August 28, 2024 and sell it today you would lose (37.00) from holding Zhongyin Babi Food or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namchow Food Group vs. Zhongyin Babi Food
Performance |
| Timeline |
| Namchow Food Group |
| Zhongyin Babi Food |
Namchow Food and Zhongyin Babi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namchow Food and Zhongyin Babi
The main advantage of trading using opposite Namchow Food and Zhongyin Babi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namchow Food position performs unexpectedly, Zhongyin Babi 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 Zhongyin Babi will offset losses from the drop in Zhongyin Babi's long position.| Namchow Food vs. China Petroleum Chemical | Namchow Food vs. PetroChina Co Ltd | Namchow Food vs. China State Construction | Namchow Food vs. China Railway Group |
| Zhongyin Babi vs. China Petroleum Chemical | Zhongyin Babi vs. PetroChina Co Ltd | Zhongyin Babi vs. China State Construction | Zhongyin Babi vs. China Railway Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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