Correlation Between Ningbo Fujia and Weihai Honglin
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By analyzing existing cross correlation between Ningbo Fujia Industrial and Weihai Honglin Electronic, you can compare the effects of market volatilities on Ningbo Fujia and Weihai Honglin 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 Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fujia and Weihai Honglin.
Diversification Opportunities for Ningbo Fujia and Weihai Honglin
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningbo and Weihai is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fujia Industrial and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic 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 Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Ningbo Fujia i.e., Ningbo Fujia and Weihai Honglin go up and down completely randomly.
Pair Corralation between Ningbo Fujia and Weihai Honglin
Assuming the 90 days trading horizon Ningbo Fujia is expected to generate 1.04 times less return on investment than Weihai Honglin. In addition to that, Ningbo Fujia is 1.26 times more volatile than Weihai Honglin Electronic. It trades about 0.09 of its total potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.12 per unit of volatility. 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 |
Ningbo Fujia Industrial vs. Weihai Honglin Electronic
Performance |
Timeline |
Ningbo Fujia Industrial |
Weihai Honglin Electronic |
Ningbo Fujia and Weihai Honglin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Fujia and Weihai Honglin
The main advantage of trading using opposite Ningbo Fujia and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fujia position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin'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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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