Correlation Between Ningxia Younglight and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Ningxia Younglight and Fiberhome Telecommunicatio 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 Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Fiberhome Telecommunicatio.
Diversification Opportunities for Ningxia Younglight and Fiberhome Telecommunicatio
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningxia and Fiberhome is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio 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 Fiberhome Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiberhome Telecommunicatio has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.19 times more return on investment than Fiberhome Telecommunicatio. However, Ningxia Younglight is 1.19 times more volatile than Fiberhome Telecommunication Technologies. It trades about 0.11 of its potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about 0.06 per unit of risk. If you would invest 615.00 in Ningxia Younglight Chemicals on September 3, 2024 and sell it today you would earn a total of 247.00 from holding Ningxia Younglight Chemicals or generate 40.16% 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. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Ningxia Younglight |
| Fiberhome Telecommunicatio |
Ningxia Younglight and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Fiberhome Telecommunicatio
The main advantage of trading using opposite Ningxia Younglight and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Fiberhome Telecommunicatio 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 Fiberhome Telecommunicatio will offset losses from the drop in Fiberhome Telecommunicatio's long position.| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Hoshine Silicon Ind |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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