Correlation Between Ningxia Younglight and Guizhou Chanhen
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Ningxia Younglight and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Guizhou Chanhen.
Diversification Opportunities for Ningxia Younglight and Guizhou Chanhen
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ningxia and Guizhou is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Guizhou Chanhen
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Guizhou Chanhen. In addition to that, Ningxia Younglight is 1.54 times more volatile than Guizhou Chanhen Chemical. It trades about -0.31 of its total potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about -0.23 per unit of volatility. If you would invest 2,418 in Guizhou Chanhen Chemical on October 25, 2024 and sell it today you would lose (237.00) from holding Guizhou Chanhen Chemical or give up 9.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Ningxia Younglight |
| Guizhou Chanhen Chemical |
Ningxia Younglight and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Guizhou Chanhen
The main advantage of trading using opposite Ningxia Younglight and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen'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 |
| Guizhou Chanhen vs. Zijin Mining Group | Guizhou Chanhen vs. Wanhua Chemical Group | Guizhou Chanhen vs. Baoshan Iron Steel | Guizhou Chanhen vs. Rongsheng Petrochemical 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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