Correlation Between Ningxia Younglight and Wanhua Chemical
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Wanhua Chemical Group, you can compare the effects of market volatilities on Ningxia Younglight and Wanhua Chemical 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 Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Wanhua Chemical.
Diversification Opportunities for Ningxia Younglight and Wanhua Chemical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ningxia and Wanhua is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Wanhua Chemical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanhua Chemical 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 Wanhua Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanhua Chemical Group has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Wanhua Chemical go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Wanhua Chemical
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Wanhua Chemical. In addition to that, Ningxia Younglight is 2.59 times more volatile than Wanhua Chemical Group. It trades about -0.02 of its total potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.03 per unit of volatility. If you would invest 7,525 in Wanhua Chemical Group on September 1, 2024 and sell it today you would lose (96.00) from holding Wanhua Chemical Group or give up 1.28% 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. Wanhua Chemical Group
Performance |
| Timeline |
| Ningxia Younglight |
| Wanhua Chemical Group |
Ningxia Younglight and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Wanhua Chemical
The main advantage of trading using opposite Ningxia Younglight and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Wanhua Chemical 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 Wanhua Chemical will offset losses from the drop in Wanhua Chemical'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 |
| Wanhua Chemical vs. Zijin Mining Group | Wanhua Chemical vs. Baoshan Iron Steel | Wanhua Chemical vs. Shandong Gold Mining | Wanhua Chemical vs. Rongsheng Petrochemical Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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