Correlation Between Ningxia Younglight and Shanghai Pudong
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Shanghai Pudong Development, you can compare the effects of market volatilities on Ningxia Younglight and Shanghai Pudong 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 Shanghai Pudong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Shanghai Pudong.
Diversification Opportunities for Ningxia Younglight and Shanghai Pudong
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningxia and Shanghai is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Shanghai Pudong Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pudong Deve 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 Shanghai Pudong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pudong Deve has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Shanghai Pudong go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Shanghai Pudong
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 2.64 times more return on investment than Shanghai Pudong. However, Ningxia Younglight is 2.64 times more volatile than Shanghai Pudong Development. It trades about -0.02 of its potential returns per unit of risk. Shanghai Pudong Development is currently generating about -0.1 per unit of risk. If you would invest 874.00 in Ningxia Younglight Chemicals on September 1, 2024 and sell it today you would lose (31.00) from holding Ningxia Younglight Chemicals or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Shanghai Pudong Development
Performance |
| Timeline |
| Ningxia Younglight |
| Shanghai Pudong Deve |
Ningxia Younglight and Shanghai Pudong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Shanghai Pudong
The main advantage of trading using opposite Ningxia Younglight and Shanghai Pudong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Shanghai Pudong 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 Shanghai Pudong will offset losses from the drop in Shanghai Pudong'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 |
| Shanghai Pudong vs. Dymatic Chemicals | Shanghai Pudong vs. Air China Ltd | Shanghai Pudong vs. Shenzhen Centralcon Investment | Shanghai Pudong 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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