Correlation Between Ningxia Younglight and Xinke Material
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Xinke Material, you can compare the effects of market volatilities on Ningxia Younglight and Xinke Material 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 Xinke Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Xinke Material.
Diversification Opportunities for Ningxia Younglight and Xinke Material
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningxia and Xinke is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Xinke Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinke Material 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 Xinke Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinke Material has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Xinke Material go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Xinke Material
Assuming the 90 days trading horizon Ningxia Younglight is expected to generate 2.98 times less return on investment than Xinke Material. In addition to that, Ningxia Younglight is 1.56 times more volatile than Xinke Material. It trades about 0.03 of its total potential returns per unit of risk. Xinke Material is currently generating about 0.15 per unit of volatility. If you would invest 217.00 in Xinke Material on August 29, 2024 and sell it today you would earn a total of 18.00 from holding Xinke Material or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Xinke Material
Performance |
| Timeline |
| Ningxia Younglight |
| Xinke Material |
Ningxia Younglight and Xinke Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Xinke Material
The main advantage of trading using opposite Ningxia Younglight and Xinke Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Xinke Material 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 Xinke Material will offset losses from the drop in Xinke Material'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 |
| Xinke Material vs. Wanhua Chemical Group | Xinke Material vs. Shandong Gold Mining | Xinke Material vs. Rongsheng Petrochemical Co | Xinke Material vs. Inner Mongolia BaoTou |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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