Correlation Between Ningbo Construction and Qijing Machinery
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By analyzing existing cross correlation between Ningbo Construction Co and Qijing Machinery, you can compare the effects of market volatilities on Ningbo Construction and Qijing Machinery 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 Construction with a short position of Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Construction and Qijing Machinery.
Diversification Opportunities for Ningbo Construction and Qijing Machinery
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Qijing is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Construction Co and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery and Ningbo Construction 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 Construction Co are associated (or correlated) with Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Ningbo Construction i.e., Ningbo Construction and Qijing Machinery go up and down completely randomly.
Pair Corralation between Ningbo Construction and Qijing Machinery
Assuming the 90 days trading horizon Ningbo Construction Co is expected to under-perform the Qijing Machinery. In addition to that, Ningbo Construction is 1.18 times more volatile than Qijing Machinery. It trades about -0.01 of its total potential returns per unit of risk. Qijing Machinery is currently generating about 0.03 per unit of volatility. If you would invest 1,246 in Qijing Machinery on October 7, 2024 and sell it today you would earn a total of 42.00 from holding Qijing Machinery or generate 3.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningbo Construction Co vs. Qijing Machinery
Performance |
Timeline |
Ningbo Construction |
Qijing Machinery |
Ningbo Construction and Qijing Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Construction and Qijing Machinery
The main advantage of trading using opposite Ningbo Construction and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Construction position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.Ningbo Construction vs. BeiGene | Ningbo Construction vs. G bits Network Technology | Ningbo Construction vs. China Mobile Limited | Ningbo Construction vs. Gansu Jiu Steel |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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