Correlation Between Ningxia Younglight and HeBei Jinniu
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and HeBei Jinniu Chemical, you can compare the effects of market volatilities on Ningxia Younglight and HeBei Jinniu 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 HeBei Jinniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and HeBei Jinniu.
Diversification Opportunities for Ningxia Younglight and HeBei Jinniu
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and HeBei is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and HeBei Jinniu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeBei Jinniu Chemical 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 HeBei Jinniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeBei Jinniu Chemical has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and HeBei Jinniu go up and down completely randomly.
Pair Corralation between Ningxia Younglight and HeBei Jinniu
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.26 times more return on investment than HeBei Jinniu. However, Ningxia Younglight is 1.26 times more volatile than HeBei Jinniu Chemical. It trades about 0.17 of its potential returns per unit of risk. HeBei Jinniu Chemical is currently generating about 0.15 per unit of risk. If you would invest 650.00 in Ningxia Younglight Chemicals on August 28, 2024 and sell it today you would earn a total of 177.00 from holding Ningxia Younglight Chemicals or generate 27.23% 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. HeBei Jinniu Chemical
Performance |
| Timeline |
| Ningxia Younglight |
| HeBei Jinniu Chemical |
Ningxia Younglight and HeBei Jinniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and HeBei Jinniu
The main advantage of trading using opposite Ningxia Younglight and HeBei Jinniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, HeBei Jinniu 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 HeBei Jinniu will offset losses from the drop in HeBei Jinniu'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 |
| HeBei Jinniu vs. Zijin Mining Group | HeBei Jinniu vs. Wanhua Chemical Group | HeBei Jinniu vs. Baoshan Iron Steel | HeBei Jinniu 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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