Correlation Between Ningxia Younglight and Yingde Greatchem
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Yingde Greatchem Chemicals, you can compare the effects of market volatilities on Ningxia Younglight and Yingde Greatchem 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 Yingde Greatchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Yingde Greatchem.
Diversification Opportunities for Ningxia Younglight and Yingde Greatchem
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Yingde is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Yingde Greatchem Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yingde Greatchem Che 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 Yingde Greatchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yingde Greatchem Che has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Yingde Greatchem go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Yingde Greatchem
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.13 times more return on investment than Yingde Greatchem. However, Ningxia Younglight is 1.13 times more volatile than Yingde Greatchem Chemicals. It trades about 0.11 of its potential returns per unit of risk. Yingde Greatchem Chemicals is currently generating about 0.07 per unit of risk. If you would invest 615.00 in Ningxia Younglight Chemicals on September 3, 2024 and sell it today you would earn a total of 247.00 from holding Ningxia Younglight Chemicals or generate 40.16% 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. Yingde Greatchem Chemicals
Performance |
| Timeline |
| Ningxia Younglight |
| Yingde Greatchem Che |
Ningxia Younglight and Yingde Greatchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Yingde Greatchem
The main advantage of trading using opposite Ningxia Younglight and Yingde Greatchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Yingde Greatchem 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 Yingde Greatchem will offset losses from the drop in Yingde Greatchem's long position.| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Hoshine Silicon Ind |
| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Hoshine Silicon Ind |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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