Correlation Between Ningxia Younglight and Hubei Dinglong
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Hubei Dinglong Chemical, you can compare the effects of market volatilities on Ningxia Younglight and Hubei Dinglong 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 Hubei Dinglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Hubei Dinglong.
Diversification Opportunities for Ningxia Younglight and Hubei Dinglong
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Hubei is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Hubei Dinglong Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Dinglong 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 Hubei Dinglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Dinglong Chemical has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Hubei Dinglong go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Hubei Dinglong
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Hubei Dinglong. In addition to that, Ningxia Younglight is 1.34 times more volatile than Hubei Dinglong Chemical. It trades about -0.02 of its total potential returns per unit of risk. Hubei Dinglong Chemical is currently generating about 0.06 per unit of volatility. If you would invest 2,706 in Hubei Dinglong Chemical on September 1, 2024 and sell it today you would earn a total of 84.00 from holding Hubei Dinglong Chemical or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Hubei Dinglong Chemical
Performance |
| Timeline |
| Ningxia Younglight |
| Hubei Dinglong Chemical |
Ningxia Younglight and Hubei Dinglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Hubei Dinglong
The main advantage of trading using opposite Ningxia Younglight and Hubei Dinglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Hubei Dinglong 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 Hubei Dinglong will offset losses from the drop in Hubei Dinglong'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 |
| Hubei Dinglong vs. Suzhou Xingye Material | Hubei Dinglong vs. ZYF Lopsking Aluminum | Hubei Dinglong vs. Guangdong Jingyi Metal | Hubei Dinglong vs. Shandong Hongchuang Aluminum |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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