Correlation Between Weihai Honglin and Ningbo Fujia
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By analyzing existing cross correlation between Weihai Honglin Electronic and Ningbo Fujia Industrial, you can compare the effects of market volatilities on Weihai Honglin and Ningbo Fujia 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 Weihai Honglin with a short position of Ningbo Fujia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weihai Honglin and Ningbo Fujia.
Diversification Opportunities for Weihai Honglin and Ningbo Fujia
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weihai and Ningbo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Weihai Honglin Electronic and Ningbo Fujia Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fujia Industrial and Weihai Honglin 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 Weihai Honglin Electronic are associated (or correlated) with Ningbo Fujia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fujia Industrial has no effect on the direction of Weihai Honglin i.e., Weihai Honglin and Ningbo Fujia go up and down completely randomly.
Pair Corralation between Weihai Honglin and Ningbo Fujia
Assuming the 90 days trading horizon Weihai Honglin Electronic is expected to generate 0.8 times more return on investment than Ningbo Fujia. However, Weihai Honglin Electronic is 1.26 times less risky than Ningbo Fujia. It trades about 0.12 of its potential returns per unit of risk. Ningbo Fujia Industrial is currently generating about 0.09 per unit of risk. If you would invest 1,291 in Weihai Honglin Electronic on October 20, 2024 and sell it today you would earn a total of 270.00 from holding Weihai Honglin Electronic or generate 20.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Weihai Honglin Electronic vs. Ningbo Fujia Industrial
Performance |
Timeline |
Weihai Honglin Electronic |
Ningbo Fujia Industrial |
Weihai Honglin and Ningbo Fujia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Weihai Honglin and Ningbo Fujia
The main advantage of trading using opposite Weihai Honglin and Ningbo Fujia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weihai Honglin position performs unexpectedly, Ningbo Fujia 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 Fujia will offset losses from the drop in Ningbo Fujia's long position.Weihai Honglin vs. Songz Automobile Air | ||
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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