Correlation Between New Hope and Ningbo David
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By analyzing existing cross correlation between New Hope Dairy and Ningbo David Medical, you can compare the effects of market volatilities on New Hope and Ningbo David 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 New Hope with a short position of Ningbo David. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Ningbo David.
Diversification Opportunities for New Hope and Ningbo David
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Ningbo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Ningbo David Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo David Medical and New Hope 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 New Hope Dairy are associated (or correlated) with Ningbo David. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo David Medical has no effect on the direction of New Hope i.e., New Hope and Ningbo David go up and down completely randomly.
Pair Corralation between New Hope and Ningbo David
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 0.91 times more return on investment than Ningbo David. However, New Hope Dairy is 1.1 times less risky than Ningbo David. It trades about 0.22 of its potential returns per unit of risk. Ningbo David Medical is currently generating about 0.1 per unit of risk. If you would invest 938.00 in New Hope Dairy on September 23, 2024 and sell it today you would earn a total of 562.00 from holding New Hope Dairy or generate 59.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
New Hope Dairy vs. Ningbo David Medical
Performance |
Timeline |
New Hope Dairy |
Ningbo David Medical |
New Hope and Ningbo David Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Hope and Ningbo David
The main advantage of trading using opposite New Hope and Ningbo David positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Ningbo David 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 David will offset losses from the drop in Ningbo David's long position.New Hope vs. Ming Yang Smart | New Hope vs. 159681 | New Hope vs. 159005 | New Hope vs. Loctek Ergonomic Technology |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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