Correlation Between Ningxia Younglight and Zhejiang Orient
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Zhejiang Orient Gene, you can compare the effects of market volatilities on Ningxia Younglight and Zhejiang Orient 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 Zhejiang Orient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Zhejiang Orient.
Diversification Opportunities for Ningxia Younglight and Zhejiang Orient
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningxia and Zhejiang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Zhejiang Orient Gene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Orient Gene 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 Zhejiang Orient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Orient Gene has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Zhejiang Orient go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Zhejiang Orient
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.23 times more return on investment than Zhejiang Orient. However, Ningxia Younglight is 1.23 times more volatile than Zhejiang Orient Gene. It trades about 0.01 of its potential returns per unit of risk. Zhejiang Orient Gene is currently generating about -0.04 per unit of risk. If you would invest 901.00 in Ningxia Younglight Chemicals on September 28, 2024 and sell it today you would lose (90.00) from holding Ningxia Younglight Chemicals or give up 9.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Zhejiang Orient Gene
Performance |
| Timeline |
| Ningxia Younglight |
| Zhejiang Orient Gene |
Ningxia Younglight and Zhejiang Orient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Zhejiang Orient
The main advantage of trading using opposite Ningxia Younglight and Zhejiang Orient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Zhejiang Orient 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 Zhejiang Orient will offset losses from the drop in Zhejiang Orient'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 |
| Zhejiang Orient vs. Ningxia Younglight Chemicals | Zhejiang Orient vs. Andon Health Co | Zhejiang Orient vs. Sanbo Hospital Management | Zhejiang Orient vs. Goodwill E Health |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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