Correlation Between Dalian Thermal and Ningbo David
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By analyzing existing cross correlation between Dalian Thermal Power and Ningbo David Medical, you can compare the effects of market volatilities on Dalian Thermal 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 Dalian Thermal with a short position of Ningbo David. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Ningbo David.
Diversification Opportunities for Dalian Thermal and Ningbo David
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalian and Ningbo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power 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 Dalian Thermal 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 Dalian Thermal Power 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 Dalian Thermal i.e., Dalian Thermal and Ningbo David go up and down completely randomly.
Pair Corralation between Dalian Thermal and Ningbo David
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 1.06 times more return on investment than Ningbo David. However, Dalian Thermal is 1.06 times more volatile than Ningbo David Medical. It trades about 0.11 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 613.00 in Dalian Thermal Power on September 23, 2024 and sell it today you would earn a total of 156.00 from holding Dalian Thermal Power or generate 25.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dalian Thermal Power vs. Ningbo David Medical
Performance |
Timeline |
Dalian Thermal Power |
Ningbo David Medical |
Dalian Thermal and Ningbo David Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dalian Thermal and Ningbo David
The main advantage of trading using opposite Dalian Thermal and Ningbo David positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal 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.Dalian Thermal vs. PetroChina Co Ltd | Dalian Thermal vs. China Mobile Limited | Dalian Thermal vs. CNOOC Limited | Dalian Thermal vs. Ping An Insurance |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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