Correlation Between Hengli Petrochemical and Ningxia Younglight
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By analyzing existing cross correlation between Hengli Petrochemical Co and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Hengli Petrochemical and Ningxia Younglight 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 Hengli Petrochemical with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and Ningxia Younglight.
Diversification Opportunities for Hengli Petrochemical and Ningxia Younglight
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hengli and Ningxia is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and Ningxia Younglight Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Younglight and Hengli Petrochemical 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 Hengli Petrochemical Co are associated (or correlated) with Ningxia Younglight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Younglight has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and Ningxia Younglight
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to generate 0.38 times more return on investment than Ningxia Younglight. However, Hengli Petrochemical Co is 2.66 times less risky than Ningxia Younglight. It trades about 0.03 of its potential returns per unit of risk. Ningxia Younglight Chemicals is currently generating about -0.02 per unit of risk. If you would invest 1,430 in Hengli Petrochemical Co on October 26, 2024 and sell it today you would earn a total of 32.00 from holding Hengli Petrochemical Co or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Petrochemical Co vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Hengli Petrochemical |
| Ningxia Younglight |
Hengli Petrochemical and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and Ningxia Younglight
The main advantage of trading using opposite Hengli Petrochemical and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, Ningxia Younglight 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 Ningxia Younglight will offset losses from the drop in Ningxia Younglight's long position.| Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical vs. Shandong Gold Mining |
| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Wanhua Chemical Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Shandong Gold Mining |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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