Correlation Between Ningbo Fangzheng and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Ningbo Fangzheng and Shenzhen Zhongzhuang 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 Ningbo Fangzheng with a short position of Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Shenzhen Zhongzhuang.
Diversification Opportunities for Ningbo Fangzheng and Shenzhen Zhongzhuang
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ningbo and Shenzhen is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang and Ningbo Fangzheng 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 Ningbo Fangzheng Automobile are associated (or correlated) with Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Shenzhen Zhongzhuang. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Fangzheng Automobile is 1.04 times less risky than Shenzhen Zhongzhuang. The stock trades about -0.03 of its potential returns per unit of risk. The Shenzhen Zhongzhuang Construction is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Shenzhen Zhongzhuang Construction on October 25, 2024 and sell it today you would lose (79.00) from holding Shenzhen Zhongzhuang Construction or give up 16.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Shenzhen Zhongzhuang Construct
Performance |
Timeline |
Ningbo Fangzheng Aut |
Shenzhen Zhongzhuang |
Ningbo Fangzheng and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Fangzheng and Shenzhen Zhongzhuang
The main advantage of trading using opposite Ningbo Fangzheng and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang's long position.Ningbo Fangzheng vs. Jahen Household Products | Ningbo Fangzheng vs. Jinsanjiang Silicon Material | Ningbo Fangzheng vs. Xinxiang Chemical Fiber | Ningbo Fangzheng vs. Ningxia Younglight Chemicals |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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