Correlation Between Ningxia Younglight and Jiugui Liquor
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Jiugui Liquor Co, you can compare the effects of market volatilities on Ningxia Younglight and Jiugui Liquor 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 Jiugui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Jiugui Liquor.
Diversification Opportunities for Ningxia Younglight and Jiugui Liquor
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Jiugui is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Jiugui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiugui Liquor 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 Jiugui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiugui Liquor has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Jiugui Liquor go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Jiugui Liquor
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Jiugui Liquor. But the stock apears to be less risky and, when comparing its historical volatility, Ningxia Younglight Chemicals is 1.25 times less risky than Jiugui Liquor. The stock trades about -0.01 of its potential returns per unit of risk. The Jiugui Liquor Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,365 in Jiugui Liquor Co on December 4, 2024 and sell it today you would earn a total of 386.00 from holding Jiugui Liquor Co or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Jiugui Liquor Co
Performance |
| Timeline |
| Ningxia Younglight |
| Jiugui Liquor |
Ningxia Younglight and Jiugui Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Jiugui Liquor
The main advantage of trading using opposite Ningxia Younglight and Jiugui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Jiugui Liquor 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 Jiugui Liquor will offset losses from the drop in Jiugui Liquor's long position.| Ningxia Younglight vs. Hubei Huaqiang High Tech | Ningxia Younglight vs. Linewell Software Co | Ningxia Younglight vs. Grinm Advanced Materials | Ningxia Younglight vs. Orinko Advanced Plastics |
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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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