Correlation Between Road Environment and Ningbo Fangzheng
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By analyzing existing cross correlation between Road Environment Technology and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Road Environment 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 Road Environment with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Road Environment and Ningbo Fangzheng.
Diversification Opportunities for Road Environment and Ningbo Fangzheng
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Road and Ningbo is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Road Environment Technology 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 Road Environment 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 Road Environment Technology 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 Road Environment i.e., Road Environment and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Road Environment and Ningbo Fangzheng
Assuming the 90 days trading horizon Road Environment is expected to generate 6.23 times less return on investment than Ningbo Fangzheng. But when comparing it to its historical volatility, Road Environment Technology is 1.23 times less risky than Ningbo Fangzheng. It trades about 0.02 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Ningbo Fangzheng Automobile on September 1, 2024 and sell it today you would earn a total of 123.00 from holding Ningbo Fangzheng Automobile or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Road Environment Technology vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Road Environment Tec |
| Ningbo Fangzheng Aut |
Road Environment and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Road Environment and Ningbo Fangzheng
The main advantage of trading using opposite Road Environment and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Road Environment 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.| Road Environment vs. Lutian Machinery Co | Road Environment vs. China Longyuan Power | Road Environment vs. PetroChina Co Ltd | Road Environment vs. Bank of China |
| Ningbo Fangzheng vs. Hangzhou Prevail Optoelectronic | Ningbo Fangzheng vs. Xizi Clean Energy | Ningbo Fangzheng vs. AVIC Fund Management | Ningbo Fangzheng vs. Harvest Fund Management |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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