Correlation Between GreenTech Environmental and Ningbo Kangqiang
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By analyzing existing cross correlation between GreenTech Environmental Co and Ningbo Kangqiang Electronics, you can compare the effects of market volatilities on GreenTech Environmental and Ningbo Kangqiang 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 GreenTech Environmental with a short position of Ningbo Kangqiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTech Environmental and Ningbo Kangqiang.
Diversification Opportunities for GreenTech Environmental and Ningbo Kangqiang
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GreenTech and Ningbo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GreenTech Environmental Co and Ningbo Kangqiang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Kangqiang Ele and GreenTech Environmental 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 GreenTech Environmental Co are associated (or correlated) with Ningbo Kangqiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Kangqiang Ele has no effect on the direction of GreenTech Environmental i.e., GreenTech Environmental and Ningbo Kangqiang go up and down completely randomly.
Pair Corralation between GreenTech Environmental and Ningbo Kangqiang
Assuming the 90 days trading horizon GreenTech Environmental is expected to generate 1.38 times less return on investment than Ningbo Kangqiang. But when comparing it to its historical volatility, GreenTech Environmental Co is 2.63 times less risky than Ningbo Kangqiang. It trades about 0.19 of its potential returns per unit of risk. Ningbo Kangqiang Electronics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,609 in Ningbo Kangqiang Electronics on November 7, 2024 and sell it today you would earn a total of 104.00 from holding Ningbo Kangqiang Electronics or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTech Environmental Co vs. Ningbo Kangqiang Electronics
Performance |
| Timeline |
| GreenTech Environmental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ningbo Kangqiang Ele |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
GreenTech Environmental and Ningbo Kangqiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTech Environmental and Ningbo Kangqiang
The main advantage of trading using opposite GreenTech Environmental and Ningbo Kangqiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTech Environmental position performs unexpectedly, Ningbo Kangqiang 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 Kangqiang will offset losses from the drop in Ningbo Kangqiang's long position.The idea behind GreenTech Environmental Co and Ningbo Kangqiang Electronics 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.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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