Correlation Between Shareate Tools and Ningbo Thermal
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By analyzing existing cross correlation between Shareate Tools and Ningbo Thermal Power, you can compare the effects of market volatilities on Shareate Tools and Ningbo Thermal 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 Shareate Tools with a short position of Ningbo Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shareate Tools and Ningbo Thermal.
Diversification Opportunities for Shareate Tools and Ningbo Thermal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shareate and Ningbo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shareate Tools and Ningbo Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Thermal Power and Shareate Tools 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 Shareate Tools are associated (or correlated) with Ningbo Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Thermal Power has no effect on the direction of Shareate Tools i.e., Shareate Tools and Ningbo Thermal go up and down completely randomly.
Pair Corralation between Shareate Tools and Ningbo Thermal
Assuming the 90 days trading horizon Shareate Tools is expected to generate 1.69 times more return on investment than Ningbo Thermal. However, Shareate Tools is 1.69 times more volatile than Ningbo Thermal Power. It trades about 0.06 of its potential returns per unit of risk. Ningbo Thermal Power is currently generating about 0.02 per unit of risk. If you would invest 1,751 in Shareate Tools on September 12, 2024 and sell it today you would earn a total of 48.00 from holding Shareate Tools or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shareate Tools vs. Ningbo Thermal Power
Performance |
| Timeline |
| Shareate Tools |
| Ningbo Thermal Power |
Shareate Tools and Ningbo Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shareate Tools and Ningbo Thermal
The main advantage of trading using opposite Shareate Tools and Ningbo Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shareate Tools position performs unexpectedly, Ningbo Thermal 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 Thermal will offset losses from the drop in Ningbo Thermal's long position.| Shareate Tools vs. JCHX Mining Management | Shareate Tools vs. Sanbo Hospital Management | Shareate Tools vs. China Asset Management | Shareate Tools vs. Railway Signal Communication |
| Ningbo Thermal vs. Gansu Jiu Steel | Ningbo Thermal vs. Shandong Mining Machinery | Ningbo Thermal vs. Aba Chemicals Corp | Ningbo Thermal vs. BlueFocus Communication 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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