Correlation Between Ningxia Younglight and Gansu Huangtai
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on Ningxia Younglight and Gansu Huangtai 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 Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Gansu Huangtai.
Diversification Opportunities for Ningxia Younglight and Gansu Huangtai
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Gansu is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine 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 Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Gansu Huangtai go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Gansu Huangtai
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 0.87 times more return on investment than Gansu Huangtai. However, Ningxia Younglight Chemicals is 1.14 times less risky than Gansu Huangtai. It trades about 0.12 of its potential returns per unit of risk. Gansu Huangtai Wine marketing is currently generating about 0.04 per unit of risk. If you would invest 721.00 in Ningxia Younglight Chemicals on September 3, 2024 and sell it today you would earn a total of 122.00 from holding Ningxia Younglight Chemicals or generate 16.92% 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. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| Ningxia Younglight |
| Gansu Huangtai Wine |
Ningxia Younglight and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Gansu Huangtai
The main advantage of trading using opposite Ningxia Younglight and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai's long position.| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Rongsheng Petrochemical Co | Ningxia Younglight vs. Hoshine Silicon Ind |
| Gansu Huangtai vs. Sichuan Yahua Industrial | Gansu Huangtai vs. Anhui Deli Household | Gansu Huangtai vs. Guangdong Brandmax Marketing | Gansu Huangtai vs. Zhangjiagang Freetrade Science |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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