Correlation Between Ningbo Ligong and Dook Media

Can any of the company-specific risk be diversified away by investing in both Ningbo Ligong and Dook Media at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ningbo Ligong and Dook Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ningbo Ligong Online and Dook Media Group, you can compare the effects of market volatilities on Ningbo Ligong and Dook Media 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 Ligong with a short position of Dook Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Ligong and Dook Media.

Diversification Opportunities for Ningbo Ligong and Dook Media

-0.02

Correlation Coefficient

Ningbo Ligong  Dook Media

Good diversification

The 3 months correlation between Ningbo and Dook is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Ligong Online and Dook Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dook Media Group and Ningbo Ligong 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 Ligong Online are associated (or correlated) with Dook Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dook Media Group has no effect on the direction of Ningbo Ligong i.e., Ningbo Ligong and Dook Media go up and down completely randomly.

Pair Corralation between Ningbo Ligong and Dook Media

Assuming the 90 days trading horizon Ningbo Ligong Online is expected to under-perform the Dook Media. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Ligong Online is 1.45 times less risky than Dook Media. The stock trades about -0.05 of its potential returns per unit of risk. The Dook Media Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,046  in Dook Media Group on September 29, 2024 and sell it today you would lose (43.00) from holding Dook Media Group or give up 4.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ningbo Ligong Online  vs.  Dook Media Group

Ningbo Ligong Online

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ningbo Ligong Online has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Dook Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dook Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dook Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ningbo Ligong and Dook Media

The main advantage of trading using opposite Ningbo Ligong and Dook Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Ligong position performs unexpectedly, Dook Media 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 Dook Media will offset losses from the drop in Dook Media's long position.

The idea behind Ningbo Ligong Online and Dook Media Group 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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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.