Correlation Between Ningxia Younglight and Dongfeng Automobile
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Dongfeng Automobile Co, you can compare the effects of market volatilities on Ningxia Younglight and Dongfeng Automobile 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 Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Dongfeng Automobile.
Diversification Opportunities for Ningxia Younglight and Dongfeng Automobile
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Dongfeng is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile 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 Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Dongfeng Automobile
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Dongfeng Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Ningxia Younglight Chemicals is 1.09 times less risky than Dongfeng Automobile. The stock trades about -0.04 of its potential returns per unit of risk. The Dongfeng Automobile Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 629.00 in Dongfeng Automobile Co on September 2, 2024 and sell it today you would earn a total of 107.00 from holding Dongfeng Automobile Co or generate 17.01% 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. Dongfeng Automobile Co
Performance |
| Timeline |
| Ningxia Younglight |
| Dongfeng Automobile |
Ningxia Younglight and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Dongfeng Automobile
The main advantage of trading using opposite Ningxia Younglight and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile'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 |
| Dongfeng Automobile vs. Biwin Storage Technology | Dongfeng Automobile vs. PetroChina Co Ltd | Dongfeng Automobile vs. Industrial and Commercial | Dongfeng Automobile vs. China Construction Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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