Correlation Between Southchip Semiconductor and Ningbo Construction
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By analyzing existing cross correlation between Southchip Semiconductor Technology and Ningbo Construction Co, you can compare the effects of market volatilities on Southchip Semiconductor and Ningbo Construction 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 Southchip Semiconductor with a short position of Ningbo Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southchip Semiconductor and Ningbo Construction.
Diversification Opportunities for Southchip Semiconductor and Ningbo Construction
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Southchip and Ningbo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Southchip Semiconductor Techno and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction and Southchip Semiconductor 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 Southchip Semiconductor Technology are associated (or correlated) with Ningbo Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Southchip Semiconductor i.e., Southchip Semiconductor and Ningbo Construction go up and down completely randomly.
Pair Corralation between Southchip Semiconductor and Ningbo Construction
Assuming the 90 days trading horizon Southchip Semiconductor Technology is expected to generate 0.79 times more return on investment than Ningbo Construction. However, Southchip Semiconductor Technology is 1.27 times less risky than Ningbo Construction. It trades about -0.29 of its potential returns per unit of risk. Ningbo Construction Co is currently generating about -0.25 per unit of risk. If you would invest 3,996 in Southchip Semiconductor Technology on October 7, 2024 and sell it today you would lose (616.00) from holding Southchip Semiconductor Technology or give up 15.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Southchip Semiconductor Techno vs. Ningbo Construction Co
Performance |
Timeline |
Southchip Semiconductor |
Ningbo Construction |
Southchip Semiconductor and Ningbo Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Southchip Semiconductor and Ningbo Construction
The main advantage of trading using opposite Southchip Semiconductor and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southchip Semiconductor position performs unexpectedly, Ningbo Construction 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 Construction will offset losses from the drop in Ningbo Construction's long position.The idea behind Southchip Semiconductor Technology and Ningbo Construction Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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