Correlation Between Huatian Hotel and Ningxia Younglight
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By analyzing existing cross correlation between Huatian Hotel Group and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Huatian Hotel and Ningxia Younglight 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 Huatian Hotel with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Ningxia Younglight.
Diversification Opportunities for Huatian Hotel and Ningxia Younglight
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huatian and Ningxia is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Ningxia Younglight Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Younglight and Huatian Hotel 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 Huatian Hotel Group are associated (or correlated) with Ningxia Younglight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Younglight has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Huatian Hotel and Ningxia Younglight
Assuming the 90 days trading horizon Huatian Hotel Group is expected to under-perform the Ningxia Younglight. But the stock apears to be less risky and, when comparing its historical volatility, Huatian Hotel Group is 1.18 times less risky than Ningxia Younglight. The stock trades about -0.01 of its potential returns per unit of risk. The Ningxia Younglight Chemicals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 870.00 in Ningxia Younglight Chemicals on August 25, 2024 and sell it today you would lose (38.00) from holding Ningxia Younglight Chemicals or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huatian Hotel Group vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Huatian Hotel Group |
| Ningxia Younglight |
Huatian Hotel and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huatian Hotel and Ningxia Younglight
The main advantage of trading using opposite Huatian Hotel and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Ningxia Younglight 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 Ningxia Younglight will offset losses from the drop in Ningxia Younglight's long position.| Huatian Hotel vs. Biwin Storage Technology | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel vs. Industrial and Commercial | Huatian Hotel vs. China Construction Bank |
| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Wanhua Chemical Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Shandong Gold 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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