Correlation Between Ningxia Younglight and Semiconductor Manufacturing
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Semiconductor Manufacturing Electronics, you can compare the effects of market volatilities on Ningxia Younglight and Semiconductor Manufacturing 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 Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Semiconductor Manufacturing.
Diversification Opportunities for Ningxia Younglight and Semiconductor Manufacturing
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ningxia and Semiconductor is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Semiconductor Manufacturing El in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing 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 Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Semiconductor Manufacturing
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.29 times more return on investment than Semiconductor Manufacturing. However, Ningxia Younglight is 1.29 times more volatile than Semiconductor Manufacturing Electronics. It trades about 0.01 of its potential returns per unit of risk. Semiconductor Manufacturing Electronics is currently generating about 0.01 per unit of risk. If you would invest 919.00 in Ningxia Younglight Chemicals on September 14, 2024 and sell it today you would lose (31.00) from holding Ningxia Younglight Chemicals or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 82.14% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Semiconductor Manufacturing El
Performance |
| Timeline |
| Ningxia Younglight |
| Semiconductor Manufacturing |
Ningxia Younglight and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Semiconductor Manufacturing
The main advantage of trading using opposite Ningxia Younglight and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.The idea behind Ningxia Younglight Chemicals and Semiconductor Manufacturing Electronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 CEOs Directory module to screen CEOs from public companies around the world.
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