Correlation Between Yueyang Xingchang and NBTM New
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By analyzing existing cross correlation between Yueyang Xingchang Petro Chemical and NBTM New Materials, you can compare the effects of market volatilities on Yueyang Xingchang and NBTM New 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 Yueyang Xingchang with a short position of NBTM New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yueyang Xingchang and NBTM New.
Diversification Opportunities for Yueyang Xingchang and NBTM New
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yueyang and NBTM is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Yueyang Xingchang Petro Chemic and NBTM New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBTM New Materials and Yueyang Xingchang 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 Yueyang Xingchang Petro Chemical are associated (or correlated) with NBTM New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBTM New Materials has no effect on the direction of Yueyang Xingchang i.e., Yueyang Xingchang and NBTM New go up and down completely randomly.
Pair Corralation between Yueyang Xingchang and NBTM New
Assuming the 90 days trading horizon Yueyang Xingchang Petro Chemical is expected to under-perform the NBTM New. But the stock apears to be less risky and, when comparing its historical volatility, Yueyang Xingchang Petro Chemical is 1.33 times less risky than NBTM New. The stock trades about -0.08 of its potential returns per unit of risk. The NBTM New Materials is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,538 in NBTM New Materials on November 8, 2024 and sell it today you would earn a total of 295.00 from holding NBTM New Materials or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yueyang Xingchang Petro Chemic vs. NBTM New Materials
Performance |
| Timeline |
| Yueyang Xingchang Petro |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NBTM New Materials |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Yueyang Xingchang and NBTM New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yueyang Xingchang and NBTM New
The main advantage of trading using opposite Yueyang Xingchang and NBTM New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yueyang Xingchang position performs unexpectedly, NBTM New 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 NBTM New will offset losses from the drop in NBTM New's long position.The idea behind Yueyang Xingchang Petro Chemical and NBTM New Materials 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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