Correlation Between Sinocat Environmental and Ningbo Kangqiang
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By analyzing existing cross correlation between Sinocat Environmental Technology and Ningbo Kangqiang Electronics, you can compare the effects of market volatilities on Sinocat 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 Sinocat Environmental with a short position of Ningbo Kangqiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinocat Environmental and Ningbo Kangqiang.
Diversification Opportunities for Sinocat Environmental and Ningbo Kangqiang
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinocat and Ningbo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sinocat Environmental Technolo 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 Sinocat 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 Sinocat Environmental Technology 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 Sinocat Environmental i.e., Sinocat Environmental and Ningbo Kangqiang go up and down completely randomly.
Pair Corralation between Sinocat Environmental and Ningbo Kangqiang
Assuming the 90 days trading horizon Sinocat Environmental Technology is expected to under-perform the Ningbo Kangqiang. In addition to that, Sinocat Environmental is 1.09 times more volatile than Ningbo Kangqiang Electronics. It trades about -0.01 of its total potential returns per unit of risk. Ningbo Kangqiang Electronics is currently generating about 0.02 per unit of volatility. If you would invest 1,494 in Ningbo Kangqiang Electronics on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Ningbo Kangqiang Electronics or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.71% |
| Values | Daily Returns |
Sinocat Environmental Technolo vs. Ningbo Kangqiang Electronics
Performance |
| Timeline |
| Sinocat Environmental |
| Ningbo Kangqiang Ele |
Sinocat Environmental and Ningbo Kangqiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinocat Environmental and Ningbo Kangqiang
The main advantage of trading using opposite Sinocat Environmental and Ningbo Kangqiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinocat 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.| Sinocat Environmental vs. Lutian Machinery Co | Sinocat Environmental vs. PetroChina Co Ltd | Sinocat Environmental vs. Bank of China | Sinocat Environmental vs. Gansu Jiu Steel |
| Ningbo Kangqiang vs. Guangdong Brandmax Marketing | Ningbo Kangqiang vs. Gansu Huangtai Wine marketing | Ningbo Kangqiang vs. Sinocat Environmental Technology | Ningbo Kangqiang vs. Duzhe Publishing Media |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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