Correlation Between Ningxia Younglight and Huatian Hotel
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Huatian Hotel Group, you can compare the effects of market volatilities on Ningxia Younglight and Huatian Hotel 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 Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Huatian Hotel.
Diversification Opportunities for Ningxia Younglight and Huatian Hotel
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Huatian is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Huatian Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatian Hotel Group 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 Huatian Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatian Hotel Group has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Huatian Hotel go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Huatian Hotel
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.18 times more return on investment than Huatian Hotel. However, Ningxia Younglight is 1.18 times more volatile than Huatian Hotel Group. It trades about 0.01 of its potential returns per unit of risk. Huatian Hotel Group is currently generating about -0.01 per unit of risk. 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 |
Ningxia Younglight Chemicals vs. Huatian Hotel Group
Performance |
| Timeline |
| Ningxia Younglight |
| Huatian Hotel Group |
Ningxia Younglight and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Huatian Hotel
The main advantage of trading using opposite Ningxia Younglight and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Huatian Hotel 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 Huatian Hotel will offset losses from the drop in Huatian Hotel's long position.| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Wanhua Chemical Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Shandong Gold Mining |
| Huatian Hotel vs. Biwin Storage Technology | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel vs. Industrial and Commercial | Huatian Hotel vs. China Construction Bank |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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