Correlation Between Ningxia Younglight and Ningbo Bohui
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Ningbo Bohui Chemical, you can compare the effects of market volatilities on Ningxia Younglight and Ningbo Bohui 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 Ningbo Bohui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Ningbo Bohui.
Diversification Opportunities for Ningxia Younglight and Ningbo Bohui
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Ningbo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Ningbo Bohui Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Bohui 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 Ningbo Bohui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Bohui Chemical has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Ningbo Bohui go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Ningbo Bohui
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Ningbo Bohui. In addition to that, Ningxia Younglight is 1.49 times more volatile than Ningbo Bohui Chemical. It trades about -0.02 of its total potential returns per unit of risk. Ningbo Bohui Chemical is currently generating about 0.03 per unit of volatility. If you would invest 738.00 in Ningbo Bohui Chemical on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Ningbo Bohui Chemical or generate 1.22% 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. Ningbo Bohui Chemical
Performance |
| Timeline |
| Ningxia Younglight |
| Ningbo Bohui Chemical |
Ningxia Younglight and Ningbo Bohui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Ningbo Bohui
The main advantage of trading using opposite Ningxia Younglight and Ningbo Bohui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Ningbo Bohui 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 Ningbo Bohui will offset losses from the drop in Ningbo Bohui'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 |
| Ningbo Bohui vs. Zhejiang Kingland Pipeline | Ningbo Bohui vs. ADAMA | Ningbo Bohui vs. Shanghai Lingyun Industries | Ningbo Bohui vs. Changchun Faway Automobile |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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