Correlation Between Ningxia Building and Kuangda Technology
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By analyzing existing cross correlation between Ningxia Building Materials and Kuangda Technology Group, you can compare the effects of market volatilities on Ningxia Building and Kuangda Technology 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 Ningxia Building with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Building and Kuangda Technology.
Diversification Opportunities for Ningxia Building and Kuangda Technology
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningxia and Kuangda is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Building Materials and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Ningxia Building 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 Ningxia Building Materials are associated (or correlated) with Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Ningxia Building i.e., Ningxia Building and Kuangda Technology go up and down completely randomly.
Pair Corralation between Ningxia Building and Kuangda Technology
Assuming the 90 days trading horizon Ningxia Building Materials is expected to under-perform the Kuangda Technology. In addition to that, Ningxia Building is 1.18 times more volatile than Kuangda Technology Group. It trades about -0.01 of its total potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.04 per unit of volatility. If you would invest 482.00 in Kuangda Technology Group on September 24, 2024 and sell it today you would earn a total of 86.00 from holding Kuangda Technology Group or generate 17.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ningxia Building Materials vs. Kuangda Technology Group
Performance |
Timeline |
Ningxia Building Mat |
Kuangda Technology |
Ningxia Building and Kuangda Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningxia Building and Kuangda Technology
The main advantage of trading using opposite Ningxia Building and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Building position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.Ningxia Building vs. Zijin Mining Group | Ningxia Building vs. Wanhua Chemical Group | Ningxia Building vs. Baoshan Iron Steel | Ningxia Building vs. Shandong Gold Mining |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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