Correlation Between Ningxia Younglight and TCL Corp
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and TCL Corp, you can compare the effects of market volatilities on Ningxia Younglight and TCL Corp 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 Ningxia Younglight with a short position of TCL Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and TCL Corp.
Diversification Opportunities for Ningxia Younglight and TCL Corp
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningxia and TCL is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and TCL Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCL Corp and Ningxia Younglight 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 Ningxia Younglight Chemicals are associated (or correlated) with TCL Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCL Corp has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and TCL Corp go up and down completely randomly.
Pair Corralation between Ningxia Younglight and TCL Corp
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the TCL Corp. In addition to that, Ningxia Younglight is 1.17 times more volatile than TCL Corp. It trades about -0.35 of its total potential returns per unit of risk. TCL Corp is currently generating about -0.18 per unit of volatility. If you would invest 535.00 in TCL Corp on September 12, 2024 and sell it today you would lose (44.00) from holding TCL Corp or give up 8.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. TCL Corp
Performance |
| Timeline |
| Ningxia Younglight |
| TCL Corp |
Ningxia Younglight and TCL Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and TCL Corp
The main advantage of trading using opposite Ningxia Younglight and TCL Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, TCL Corp 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 TCL Corp will offset losses from the drop in TCL Corp's long position.| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Wanhua Chemical Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Rongsheng Petrochemical Co |
| TCL Corp vs. Lutian Machinery Co | TCL Corp vs. PetroChina Co Ltd | TCL Corp vs. Bank of China | TCL Corp vs. Gansu Jiu Steel |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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