Correlation Between Shenzhen Glory and Ningxia Building
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By analyzing existing cross correlation between Shenzhen Glory Medical and Ningxia Building Materials, you can compare the effects of market volatilities on Shenzhen Glory and Ningxia Building 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 Shenzhen Glory with a short position of Ningxia Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and Ningxia Building.
Diversification Opportunities for Shenzhen Glory and Ningxia Building
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Ningxia is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical and Ningxia Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Building Mat and Shenzhen Glory 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 Shenzhen Glory Medical are associated (or correlated) with Ningxia Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Building Mat has no effect on the direction of Shenzhen Glory i.e., Shenzhen Glory and Ningxia Building go up and down completely randomly.
Pair Corralation between Shenzhen Glory and Ningxia Building
Assuming the 90 days trading horizon Shenzhen Glory is expected to generate 1.36 times less return on investment than Ningxia Building. But when comparing it to its historical volatility, Shenzhen Glory Medical is 1.05 times less risky than Ningxia Building. It trades about 0.19 of its potential returns per unit of risk. Ningxia Building Materials is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 918.00 in Ningxia Building Materials on September 9, 2024 and sell it today you would earn a total of 580.00 from holding Ningxia Building Materials or generate 63.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen Glory Medical vs. Ningxia Building Materials
Performance |
Timeline |
Shenzhen Glory Medical |
Ningxia Building Mat |
Shenzhen Glory and Ningxia Building Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen Glory and Ningxia Building
The main advantage of trading using opposite Shenzhen Glory and Ningxia Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory position performs unexpectedly, Ningxia Building 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 Ningxia Building will offset losses from the drop in Ningxia Building's long position.Shenzhen Glory vs. Lutian Machinery Co | Shenzhen Glory vs. China Longyuan Power | Shenzhen Glory vs. PetroChina Co Ltd | Shenzhen Glory vs. Bank of China |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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