Correlation Between Ningxia Younglight and Hangzhou Gaoxin
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Hangzhou Gaoxin Rubber, you can compare the effects of market volatilities on Ningxia Younglight and Hangzhou Gaoxin 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 Hangzhou Gaoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Hangzhou Gaoxin.
Diversification Opportunities for Ningxia Younglight and Hangzhou Gaoxin
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningxia and Hangzhou is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Hangzhou Gaoxin Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gaoxin Rubber 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 Hangzhou Gaoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gaoxin Rubber has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Hangzhou Gaoxin go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Hangzhou Gaoxin
Assuming the 90 days trading horizon Ningxia Younglight is expected to generate 3.43 times less return on investment than Hangzhou Gaoxin. But when comparing it to its historical volatility, Ningxia Younglight Chemicals is 1.09 times less risky than Hangzhou Gaoxin. It trades about 0.01 of its potential returns per unit of risk. Hangzhou Gaoxin Rubber is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,011 in Hangzhou Gaoxin Rubber on September 2, 2024 and sell it today you would earn a total of 71.00 from holding Hangzhou Gaoxin Rubber or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Hangzhou Gaoxin Rubber
Performance |
| Timeline |
| Ningxia Younglight |
| Hangzhou Gaoxin Rubber |
Ningxia Younglight and Hangzhou Gaoxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Hangzhou Gaoxin
The main advantage of trading using opposite Ningxia Younglight and Hangzhou Gaoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Hangzhou Gaoxin 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 Hangzhou Gaoxin will offset losses from the drop in Hangzhou Gaoxin'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 |
| Hangzhou Gaoxin vs. Zijin Mining Group | Hangzhou Gaoxin vs. Wanhua Chemical Group | Hangzhou Gaoxin vs. Baoshan Iron Steel | Hangzhou Gaoxin vs. Shandong Gold Mining |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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