Correlation Between Ningbo Homelink and Bank of Nanjing Co Ltd
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By analyzing existing cross correlation between Ningbo Homelink Eco iTech and Bank of Nanjing, you can compare the effects of market volatilities on Ningbo Homelink and Bank of Nanjing Co Ltd 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 Homelink with a short position of Bank of Nanjing Co Ltd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Homelink and Bank of Nanjing Co Ltd.
Diversification Opportunities for Ningbo Homelink and Bank of Nanjing Co Ltd
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ningbo and Bank is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Homelink Eco iTech and Bank of Nanjing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Nanjing Co Ltd and Ningbo Homelink 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 Homelink Eco iTech are associated (or correlated) with Bank of Nanjing Co Ltd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Nanjing Co Ltd has no effect on the direction of Ningbo Homelink i.e., Ningbo Homelink and Bank of Nanjing Co Ltd go up and down completely randomly.
Pair Corralation between Ningbo Homelink and Bank of Nanjing Co Ltd
Assuming the 90 days trading horizon Ningbo Homelink Eco iTech is expected to generate 6.12 times more return on investment than Bank of Nanjing Co Ltd. However, Ningbo Homelink is 6.12 times more volatile than Bank of Nanjing. It trades about 0.06 of its potential returns per unit of risk. Bank of Nanjing is currently generating about -0.3 per unit of risk. If you would invest 1,645 in Ningbo Homelink Eco iTech on December 10, 2024 and sell it today you would earn a total of 65.00 from holding Ningbo Homelink Eco iTech or generate 3.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningbo Homelink Eco iTech vs. Bank of Nanjing
Performance |
Timeline |
Ningbo Homelink Eco |
Bank of Nanjing Co Ltd |
Ningbo Homelink and Bank of Nanjing Co Ltd Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Homelink and Bank of Nanjing Co Ltd
The main advantage of trading using opposite Ningbo Homelink and Bank of Nanjing Co Ltd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Homelink position performs unexpectedly, Bank of Nanjing Co Ltd 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 Bank of Nanjing Co Ltd will offset losses from the drop in Bank of Nanjing Co Ltd's long position.Ningbo Homelink vs. Linewell Software Co | Ningbo Homelink vs. iSoftStone Information Technology | Ningbo Homelink vs. Glodon Software Co | Ningbo Homelink vs. Dareway Software Co |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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