Correlation Between Harvest Fund and Ningbo Ligong

Can any of the company-specific risk be diversified away by investing in both Harvest Fund and Ningbo Ligong 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 Harvest Fund and Ningbo Ligong into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Harvest Fund and Ningbo Ligong

0.36

Correlation Coefficient

Harvest Fund  Ningbo Ligong

Weak diversification

The 3 months correlation between Harvest and Ningbo is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Fund Management and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online and Harvest Fund 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 Harvest Fund Management are associated (or correlated) with Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Harvest Fund i.e., Harvest Fund and Ningbo Ligong go up and down completely randomly.

Pair Corralation between Harvest Fund and Ningbo Ligong

Assuming the 90 days trading horizon Harvest Fund Management is expected to generate 0.19 times more return on investment than Ningbo Ligong. However, Harvest Fund Management is 5.14 times less risky than Ningbo Ligong. It trades about 0.0 of its potential returns per unit of risk. Ningbo Ligong Online is currently generating about -0.01 per unit of risk. If you would invest  260.00  in Harvest Fund Management on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Harvest Fund Management or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Harvest Fund Management  vs.  Ningbo Ligong Online

Harvest Fund Management

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 somewhat strong basic indicators, Ningbo Ligong is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harvest Fund and Ningbo Ligong

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

The idea behind Harvest Fund Management and Ningbo Ligong Online 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.