Correlation Between Lpl Financial and BANK OF NINGBO

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

Diversification Opportunities for Lpl Financial and BANK OF NINGBO

-0.82
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Lpl Financial and 002142 is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lpl Financial Holdings and BANK OF NINGBO CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OF NINGBO and Lpl Financial 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 Lpl Financial Holdings are associated (or correlated) with BANK OF NINGBO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OF NINGBO has no effect on the direction of Lpl Financial i.e., Lpl Financial and BANK OF NINGBO go up and down completely randomly.

Pair Corralation between Lpl Financial and BANK OF NINGBO

Given the investment horizon of 90 days Lpl Financial is expected to generate 4.21 times less return on investment than BANK OF NINGBO. But when comparing it to its historical volatility, Lpl Financial Holdings is 1.07 times less risky than BANK OF NINGBO. It trades about 0.07 of its potential returns per unit of risk. BANK OF NINGBO is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  2,900  in BANK OF NINGBO on July 5, 2022 and sell it today you would earn a total of  255.00  from holding BANK OF NINGBO or generate 8.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy85.71%
ValuesDaily Returns

Lpl Financial Holdings  vs.  BANK OF NINGBO CO

 Performance (%) 
       Timeline  
Lpl Financial Holdings 
Lpl Financial Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Lpl Financial Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting essential indicators, Lpl Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Lpl Financial Price Channel

BANK OF NINGBO 
002142 Performance
0 of 100
Over the last 90 days BANK OF NINGBO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BANK OF NINGBO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

002142 Price Channel

Lpl Financial and BANK OF NINGBO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lpl Financial and BANK OF NINGBO

The main advantage of trading using opposite Lpl Financial and BANK OF NINGBO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lpl Financial position performs unexpectedly, BANK OF NINGBO 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 BANK OF NINGBO will offset losses from the drop in BANK OF NINGBO's long position.
Lpl Financial vs. Amazon Inc
The idea behind Lpl Financial Holdings and BANK OF NINGBO 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.
BANK OF NINGBO vs. BANK OF SUZHOU
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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