Correlation Between Inner Mongolia and Nanning Chemical
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Nanning Chemical Industry, you can compare the effects of market volatilities on Inner Mongolia and Nanning Chemical 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 Inner Mongolia with a short position of Nanning Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Nanning Chemical.
Diversification Opportunities for Inner Mongolia and Nanning Chemical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inner and Nanning is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Nanning Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanning Chemical Industry and Inner Mongolia 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 Inner Mongolia BaoTou are associated (or correlated) with Nanning Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanning Chemical Industry has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Nanning Chemical go up and down completely randomly.
Pair Corralation between Inner Mongolia and Nanning Chemical
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to under-perform the Nanning Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Inner Mongolia BaoTou is 1.04 times less risky than Nanning Chemical. The stock trades about -0.22 of its potential returns per unit of risk. The Nanning Chemical Industry is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 2,047 in Nanning Chemical Industry on October 11, 2024 and sell it today you would lose (319.00) from holding Nanning Chemical Industry or give up 15.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Nanning Chemical Industry
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Nanning Chemical Industry |
Inner Mongolia and Nanning Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Nanning Chemical
The main advantage of trading using opposite Inner Mongolia and Nanning Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Nanning Chemical 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 Nanning Chemical will offset losses from the drop in Nanning Chemical's long position.| Inner Mongolia vs. China Eastern Airlines | Inner Mongolia vs. Shannon Semiconductor Technology | Inner Mongolia vs. Union Semiconductor Co | Inner Mongolia vs. Fuda Alloy Materials |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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