Correlation Between Ningbo Fujia and Guangzhou Dongfang
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By analyzing existing cross correlation between Ningbo Fujia Industrial and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Ningbo Fujia and Guangzhou Dongfang 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 Fujia with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fujia and Guangzhou Dongfang.
Diversification Opportunities for Ningbo Fujia and Guangzhou Dongfang
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ningbo and Guangzhou is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fujia Industrial and Guangzhou Dongfang Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Dongfang Hotel and Ningbo Fujia 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 Fujia Industrial are associated (or correlated) with Guangzhou Dongfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Dongfang Hotel has no effect on the direction of Ningbo Fujia i.e., Ningbo Fujia and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Ningbo Fujia and Guangzhou Dongfang
Assuming the 90 days trading horizon Ningbo Fujia Industrial is expected to generate 1.59 times more return on investment than Guangzhou Dongfang. However, Ningbo Fujia is 1.59 times more volatile than Guangzhou Dongfang Hotel. It trades about 0.09 of its potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about -0.02 per unit of risk. If you would invest 1,289 in Ningbo Fujia Industrial on October 20, 2024 and sell it today you would earn a total of 232.00 from holding Ningbo Fujia Industrial or generate 18.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningbo Fujia Industrial vs. Guangzhou Dongfang Hotel
Performance |
Timeline |
Ningbo Fujia Industrial |
Guangzhou Dongfang Hotel |
Ningbo Fujia and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Fujia and Guangzhou Dongfang
The main advantage of trading using opposite Ningbo Fujia and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fujia position performs unexpectedly, Guangzhou Dongfang 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 Guangzhou Dongfang will offset losses from the drop in Guangzhou Dongfang's long position.Ningbo Fujia vs. Zhongrun Resources Investment | ||
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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