Correlation Between National Silicon and Ningbo Fangzheng
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By analyzing existing cross correlation between National Silicon Industry and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on National Silicon and Ningbo Fangzheng 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 National Silicon with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Silicon and Ningbo Fangzheng.
Diversification Opportunities for National Silicon and Ningbo Fangzheng
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Ningbo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding National Silicon Industry and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and National Silicon 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 National Silicon Industry are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of National Silicon i.e., National Silicon and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between National Silicon and Ningbo Fangzheng
Assuming the 90 days trading horizon National Silicon Industry is expected to under-perform the Ningbo Fangzheng. In addition to that, National Silicon is 1.15 times more volatile than Ningbo Fangzheng Automobile. It trades about -0.06 of its total potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.06 per unit of volatility. If you would invest 1,895 in Ningbo Fangzheng Automobile on October 5, 2024 and sell it today you would lose (331.00) from holding Ningbo Fangzheng Automobile or give up 17.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
National Silicon Industry vs. Ningbo Fangzheng Automobile
Performance |
Timeline |
National Silicon Industry |
Ningbo Fangzheng Aut |
National Silicon and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Silicon and Ningbo Fangzheng
The main advantage of trading using opposite National Silicon and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Silicon position performs unexpectedly, Ningbo Fangzheng 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 Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.National Silicon vs. Linewell Software Co | National Silicon vs. Heilongjiang Transport Development | National Silicon vs. Chongqing Road Bridge | National Silicon vs. Chengdu Xinzhu RoadBridge |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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