Correlation Between Ningxia Younglight and Ningbo Fangzheng
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Ningxia Younglight and Ningbo Fangzheng 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 Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Ningbo Fangzheng.
Diversification Opportunities for Ningxia Younglight and Ningbo Fangzheng
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ningxia and Ningbo is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut 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 Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Ningbo Fangzheng
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Ningbo Fangzheng. In addition to that, Ningxia Younglight is 1.08 times more volatile than Ningbo Fangzheng Automobile. It trades about -0.31 of its total potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.11 per unit of volatility. If you would invest 1,571 in Ningbo Fangzheng Automobile on October 25, 2024 and sell it today you would lose (115.00) from holding Ningbo Fangzheng Automobile or give up 7.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Ningxia Younglight |
| Ningbo Fangzheng Aut |
Ningxia Younglight and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Ningbo Fangzheng
The main advantage of trading using opposite Ningxia Younglight and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Ningbo Fangzheng 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 Fangzheng will offset losses from the drop in Ningbo Fangzheng'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 |
| Ningbo Fangzheng vs. Jahen Household Products | Ningbo Fangzheng vs. Jinsanjiang Silicon Material | Ningbo Fangzheng vs. Xinxiang Chemical Fiber | Ningbo Fangzheng vs. Ningxia Younglight Chemicals |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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