Correlation Between Ningxia Younglight and Shenyang Huitian
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Shenyang Huitian Thermal, you can compare the effects of market volatilities on Ningxia Younglight and Shenyang Huitian 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 Shenyang Huitian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Shenyang Huitian.
Diversification Opportunities for Ningxia Younglight and Shenyang Huitian
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningxia and Shenyang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Shenyang Huitian Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Huitian Thermal 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 Shenyang Huitian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Huitian Thermal has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Shenyang Huitian go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Shenyang Huitian
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Shenyang Huitian. In addition to that, Ningxia Younglight is 1.14 times more volatile than Shenyang Huitian Thermal. It trades about -0.16 of its total potential returns per unit of risk. Shenyang Huitian Thermal is currently generating about -0.14 per unit of volatility. If you would invest 356.00 in Shenyang Huitian Thermal on October 28, 2024 and sell it today you would lose (22.00) from holding Shenyang Huitian Thermal or give up 6.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningxia Younglight Chemicals vs. Shenyang Huitian Thermal
Performance |
Timeline |
Ningxia Younglight |
Shenyang Huitian Thermal |
Ningxia Younglight and Shenyang Huitian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningxia Younglight and Shenyang Huitian
The main advantage of trading using opposite Ningxia Younglight and Shenyang Huitian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Shenyang Huitian 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 Shenyang Huitian will offset losses from the drop in Shenyang Huitian'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 |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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