Correlation Between Ningbo Ligong and Southern PublishingMedia

Can any of the company-specific risk be diversified away by investing in both Ningbo Ligong and Southern PublishingMedia 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 Southern PublishingMedia 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 Southern PublishingMedia Co, you can compare the effects of market volatilities on Ningbo Ligong and Southern PublishingMedia 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 Southern PublishingMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Ligong and Southern PublishingMedia.

Diversification Opportunities for Ningbo Ligong and Southern PublishingMedia

-0.21

Correlation Coefficient

Ningbo Ligong  Southern PublishingMedia

Very good diversification

The 3 months correlation between Ningbo and Southern is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Ligong Online and Southern PublishingMedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern PublishingMedia 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 Southern PublishingMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern PublishingMedia has no effect on the direction of Ningbo Ligong i.e., Ningbo Ligong and Southern PublishingMedia go up and down completely randomly.

Pair Corralation between Ningbo Ligong and Southern PublishingMedia

Assuming the 90 days trading horizon Ningbo Ligong Online is expected to under-perform the Southern PublishingMedia. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Ligong Online is 1.19 times less risky than Southern PublishingMedia. The stock trades about -0.05 of its potential returns per unit of risk. The Southern PublishingMedia Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,234  in Southern PublishingMedia Co on September 29, 2024 and sell it today you would earn a total of  304.00  from holding Southern PublishingMedia Co or generate 24.64% return on investment over 90 days.

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

Ningbo Ligong Online  vs.  Southern PublishingMedia Co

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.

Southern PublishingMedia

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Southern PublishingMedia Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Southern PublishingMedia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ningbo Ligong and Southern PublishingMedia

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

The idea behind Ningbo Ligong Online and Southern PublishingMedia 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.