Correlation Between Ningbo Bohui and Shenzhen Fortune
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By analyzing existing cross correlation between Ningbo Bohui Chemical and Shenzhen Fortune Trend, you can compare the effects of market volatilities on Ningbo Bohui and Shenzhen Fortune 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 Bohui with a short position of Shenzhen Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Bohui and Shenzhen Fortune.
Diversification Opportunities for Ningbo Bohui and Shenzhen Fortune
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningbo and Shenzhen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Bohui Chemical and Shenzhen Fortune Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Fortune Trend and Ningbo Bohui 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 Bohui Chemical are associated (or correlated) with Shenzhen Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Fortune Trend has no effect on the direction of Ningbo Bohui i.e., Ningbo Bohui and Shenzhen Fortune go up and down completely randomly.
Pair Corralation between Ningbo Bohui and Shenzhen Fortune
Assuming the 90 days trading horizon Ningbo Bohui Chemical is expected to under-perform the Shenzhen Fortune. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Bohui Chemical is 1.44 times less risky than Shenzhen Fortune. The stock trades about -0.02 of its potential returns per unit of risk. The Shenzhen Fortune Trend is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,675 in Shenzhen Fortune Trend on September 26, 2024 and sell it today you would earn a total of 12,725 from holding Shenzhen Fortune Trend or generate 190.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 99.79% |
Values | Daily Returns |
Ningbo Bohui Chemical vs. Shenzhen Fortune Trend
Performance |
Timeline |
Ningbo Bohui Chemical |
Shenzhen Fortune Trend |
Ningbo Bohui and Shenzhen Fortune Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Bohui and Shenzhen Fortune
The main advantage of trading using opposite Ningbo Bohui and Shenzhen Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Bohui position performs unexpectedly, Shenzhen Fortune 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 Shenzhen Fortune will offset losses from the drop in Shenzhen Fortune's long position.Ningbo Bohui vs. Qingdao Foods Co | Ningbo Bohui vs. Eastroc Beverage Group | Ningbo Bohui vs. Sichuan Teway Food | Ningbo Bohui vs. Guilin Seamild Foods |
Shenzhen Fortune vs. Zhejiang Yayi Metal | Shenzhen Fortune vs. Ningbo Bohui Chemical | Shenzhen Fortune vs. Minmetals Capital Co | Shenzhen Fortune vs. Pengxin International Mining |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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