Correlation Between Ningxia Younglight and BTG Hotels
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and BTG Hotels Group, you can compare the effects of market volatilities on Ningxia Younglight and BTG Hotels 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 BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and BTG Hotels.
Diversification Opportunities for Ningxia Younglight and BTG Hotels
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and BTG is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels Group 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 BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and BTG Hotels go up and down completely randomly.
Pair Corralation between Ningxia Younglight and BTG Hotels
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 2.34 times more return on investment than BTG Hotels. However, Ningxia Younglight is 2.34 times more volatile than BTG Hotels Group. It trades about 0.03 of its potential returns per unit of risk. BTG Hotels Group is currently generating about 0.04 per unit of risk. If you would invest 818.00 in Ningxia Younglight Chemicals on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Ningxia Younglight Chemicals or generate 1.1% 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. BTG Hotels Group
Performance |
| Timeline |
| Ningxia Younglight |
| BTG Hotels Group |
Ningxia Younglight and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and BTG Hotels
The main advantage of trading using opposite Ningxia Younglight and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, BTG Hotels 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 BTG Hotels will offset losses from the drop in BTG Hotels' 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 |
| BTG Hotels vs. Biwin Storage Technology | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Industrial and Commercial | BTG Hotels vs. China Construction Bank |
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