Correlation Between Ningxia Younglight and Suzhou Xingye
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Suzhou Xingye Material, you can compare the effects of market volatilities on Ningxia Younglight and Suzhou Xingye 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 Suzhou Xingye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Suzhou Xingye.
Diversification Opportunities for Ningxia Younglight and Suzhou Xingye
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningxia and Suzhou is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Suzhou Xingye Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Xingye Material 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 Suzhou Xingye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Xingye Material has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Suzhou Xingye go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Suzhou Xingye
Assuming the 90 days trading horizon Ningxia Younglight is expected to generate 2.76 times less return on investment than Suzhou Xingye. In addition to that, Ningxia Younglight is 1.22 times more volatile than Suzhou Xingye Material. It trades about 0.03 of its total potential returns per unit of risk. Suzhou Xingye Material is currently generating about 0.11 per unit of volatility. If you would invest 846.00 in Suzhou Xingye Material on August 29, 2024 and sell it today you would earn a total of 60.00 from holding Suzhou Xingye Material or generate 7.09% 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. Suzhou Xingye Material
Performance |
| Timeline |
| Ningxia Younglight |
| Suzhou Xingye Material |
Ningxia Younglight and Suzhou Xingye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Suzhou Xingye
The main advantage of trading using opposite Ningxia Younglight and Suzhou Xingye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Suzhou Xingye 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 Suzhou Xingye will offset losses from the drop in Suzhou Xingye'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 |
| Suzhou Xingye vs. Guosheng Financial Holding | Suzhou Xingye vs. Industrial Bank Co | Suzhou Xingye vs. HeBei Jinniu Chemical | Suzhou Xingye vs. Jilin Chemical Fibre |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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