Correlation Between Ningbo Fangzheng and Standard

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Can any of the company-specific risk be diversified away by investing in both Ningbo Fangzheng and Standard 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 Fangzheng and Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Standard Motor Products, you can compare the effects of market volatilities on Ningbo Fangzheng and Standard 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 Fangzheng with a short position of Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Standard.

Diversification Opportunities for Ningbo Fangzheng and Standard

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ningbo and Standard is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Standard Motor Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Motor Products and Ningbo Fangzheng 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 Fangzheng Automobile are associated (or correlated) with Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Motor Products has no effect on the direction of Ningbo Fangzheng i.e., Ningbo Fangzheng and Standard go up and down completely randomly.

Pair Corralation between Ningbo Fangzheng and Standard

Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Standard. In addition to that, Ningbo Fangzheng is 1.32 times more volatile than Standard Motor Products. It trades about -0.12 of its total potential returns per unit of risk. Standard Motor Products is currently generating about -0.05 per unit of volatility. If you would invest  3,967  in Standard Motor Products on September 5, 2025 and sell it today you would lose (259.00) from holding Standard Motor Products or give up 6.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy92.06%
ValuesDaily Returns

Ningbo Fangzheng Automobile  vs.  Standard Motor Products

 Performance 
       Timeline  
Ningbo Fangzheng Aut 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Ningbo Fangzheng Automobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the company investors.
Standard Motor Products 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Standard Motor Products has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Standard is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Ningbo Fangzheng and Standard Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ningbo Fangzheng and Standard

The main advantage of trading using opposite Ningbo Fangzheng and Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng position performs unexpectedly, Standard 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 Standard will offset losses from the drop in Standard's long position.
The idea behind Ningbo Fangzheng Automobile and Standard Motor Products 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.
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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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