Correlation Between Ningxia Younglight and Nantong Jiangshan
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Nantong Jiangshan Agrochemical, you can compare the effects of market volatilities on Ningxia Younglight and Nantong Jiangshan 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 Nantong Jiangshan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Nantong Jiangshan.
Diversification Opportunities for Ningxia Younglight and Nantong Jiangshan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Nantong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Nantong Jiangshan Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantong Jiangshan 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 Nantong Jiangshan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantong Jiangshan has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Nantong Jiangshan go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Nantong Jiangshan
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.54 times more return on investment than Nantong Jiangshan. However, Ningxia Younglight is 1.54 times more volatile than Nantong Jiangshan Agrochemical. It trades about 0.12 of its potential returns per unit of risk. Nantong Jiangshan Agrochemical is currently generating about -0.01 per unit of risk. If you would invest 700.00 in Ningxia Younglight Chemicals on August 30, 2024 and sell it today you would earn a total of 128.00 from holding Ningxia Younglight Chemicals or generate 18.29% 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. Nantong Jiangshan Agrochemical
Performance |
| Timeline |
| Ningxia Younglight |
| Nantong Jiangshan |
Ningxia Younglight and Nantong Jiangshan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Nantong Jiangshan
The main advantage of trading using opposite Ningxia Younglight and Nantong Jiangshan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Nantong Jiangshan 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 Nantong Jiangshan will offset losses from the drop in Nantong Jiangshan'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 |
| Nantong Jiangshan vs. Zijin Mining Group | Nantong Jiangshan vs. Wanhua Chemical Group | Nantong Jiangshan vs. Baoshan Iron Steel | Nantong Jiangshan vs. Shandong Gold Mining |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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