Correlation Between Cabio Biotech and Ningbo Fangzheng
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By analyzing existing cross correlation between Cabio Biotech Wuhan and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Cabio Biotech 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 Cabio Biotech with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabio Biotech and Ningbo Fangzheng.
Diversification Opportunities for Cabio Biotech and Ningbo Fangzheng
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cabio and Ningbo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cabio Biotech Wuhan 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 Cabio Biotech 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 Cabio Biotech Wuhan 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 Cabio Biotech i.e., Cabio Biotech and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Cabio Biotech and Ningbo Fangzheng
Assuming the 90 days trading horizon Cabio Biotech Wuhan is expected to under-perform the Ningbo Fangzheng. But the stock apears to be less risky and, when comparing its historical volatility, Cabio Biotech Wuhan is 1.04 times less risky than Ningbo Fangzheng. The stock trades about -0.07 of its potential returns per unit of risk. The Ningbo Fangzheng Automobile is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,623 in Ningbo Fangzheng Automobile on October 30, 2024 and sell it today you would lose (128.00) from holding Ningbo Fangzheng Automobile or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabio Biotech Wuhan vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Cabio Biotech Wuhan |
| Ningbo Fangzheng Aut |
Cabio Biotech and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabio Biotech and Ningbo Fangzheng
The main advantage of trading using opposite Cabio Biotech and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabio Biotech 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.| Cabio Biotech vs. Railway Signal Communication | Cabio Biotech vs. BizConf Telecom Co | Cabio Biotech vs. Dongfeng Automobile Co | Cabio Biotech vs. Allwin Telecommunication Co |
| Ningbo Fangzheng vs. Kweichow Moutai Co | Ningbo Fangzheng vs. Jiangsu Pacific Quartz | Ningbo Fangzheng vs. Shenzhen Transsion Holdings | Ningbo Fangzheng vs. Beijing Roborock Technology |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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