Correlation Between Xiamen Goldenhome and Ningbo Ligong
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By analyzing existing cross correlation between Xiamen Goldenhome Co and Ningbo Ligong Online, you can compare the effects of market volatilities on Xiamen Goldenhome and Ningbo Ligong 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 Xiamen Goldenhome with a short position of Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Goldenhome and Ningbo Ligong.
Diversification Opportunities for Xiamen Goldenhome and Ningbo Ligong
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xiamen and Ningbo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Goldenhome Co and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online and Xiamen Goldenhome 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 Xiamen Goldenhome Co are associated (or correlated) with Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Xiamen Goldenhome i.e., Xiamen Goldenhome and Ningbo Ligong go up and down completely randomly.
Pair Corralation between Xiamen Goldenhome and Ningbo Ligong
Assuming the 90 days trading horizon Xiamen Goldenhome Co is expected to under-perform the Ningbo Ligong. But the stock apears to be less risky and, when comparing its historical volatility, Xiamen Goldenhome Co is 1.11 times less risky than Ningbo Ligong. The stock trades about -0.02 of its potential returns per unit of risk. The Ningbo Ligong Online is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,173 in Ningbo Ligong Online on September 25, 2024 and sell it today you would earn a total of 129.00 from holding Ningbo Ligong Online or generate 11.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Xiamen Goldenhome Co vs. Ningbo Ligong Online
Performance |
Timeline |
Xiamen Goldenhome |
Ningbo Ligong Online |
Xiamen Goldenhome and Ningbo Ligong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xiamen Goldenhome and Ningbo Ligong
The main advantage of trading using opposite Xiamen Goldenhome and Ningbo Ligong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Goldenhome position performs unexpectedly, Ningbo Ligong 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 Ligong will offset losses from the drop in Ningbo Ligong's long position.Xiamen Goldenhome vs. Agricultural Bank of | Xiamen Goldenhome vs. Industrial and Commercial | Xiamen Goldenhome vs. Bank of China | Xiamen Goldenhome vs. China Construction Bank |
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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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