Correlation Between Ningxia Younglight and North Chemical
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and North Chemical Industries, you can compare the effects of market volatilities on Ningxia Younglight and North Chemical 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 North Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and North Chemical.
Diversification Opportunities for Ningxia Younglight and North Chemical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and North is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and North Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Chemical Industries 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 North Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Chemical Industries has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and North Chemical go up and down completely randomly.
Pair Corralation between Ningxia Younglight and North Chemical
Assuming the 90 days trading horizon Ningxia Younglight is expected to generate 2.25 times less return on investment than North Chemical. In addition to that, Ningxia Younglight is 1.01 times more volatile than North Chemical Industries. It trades about 0.01 of its total potential returns per unit of risk. North Chemical Industries is currently generating about 0.01 per unit of volatility. If you would invest 1,242 in North Chemical Industries on September 3, 2024 and sell it today you would lose (4.00) from holding North Chemical Industries or give up 0.32% 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. North Chemical Industries
Performance |
| Timeline |
| Ningxia Younglight |
| North Chemical Industries |
Ningxia Younglight and North Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and North Chemical
The main advantage of trading using opposite Ningxia Younglight and North Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, North Chemical 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 North Chemical will offset losses from the drop in North Chemical'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 |
| North Chemical vs. Shandong Polymer Biochemicals | North Chemical vs. Ningxia Younglight Chemicals | North Chemical vs. Miracll Chemicals Co | North Chemical vs. Shuhua Sports Co |
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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