Correlation Between Bangyan Technology and Ningbo MedicalSystem
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By analyzing existing cross correlation between Bangyan Technology Co and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Bangyan Technology and Ningbo MedicalSystem 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 Bangyan Technology with a short position of Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangyan Technology and Ningbo MedicalSystem.
Diversification Opportunities for Bangyan Technology and Ningbo MedicalSystem
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bangyan and Ningbo is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bangyan Technology Co and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem and Bangyan Technology 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 Bangyan Technology Co are associated (or correlated) with Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Bangyan Technology i.e., Bangyan Technology and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Bangyan Technology and Ningbo MedicalSystem
Assuming the 90 days trading horizon Bangyan Technology Co is expected to under-perform the Ningbo MedicalSystem. In addition to that, Bangyan Technology is 1.15 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about -0.02 of its total potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about 0.01 per unit of volatility. If you would invest 1,170 in Ningbo MedicalSystem Biotechnology on September 3, 2024 and sell it today you would lose (9.00) from holding Ningbo MedicalSystem Biotechnology or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.58% |
| Values | Daily Returns |
Bangyan Technology Co vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Bangyan Technology |
| Ningbo MedicalSystem |
Bangyan Technology and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangyan Technology and Ningbo MedicalSystem
The main advantage of trading using opposite Bangyan Technology and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangyan Technology position performs unexpectedly, Ningbo MedicalSystem 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 MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.The idea behind Bangyan Technology Co and Ningbo MedicalSystem Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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