Correlation Between Beijing Sanyuan and Ningxia Younglight
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By analyzing existing cross correlation between Beijing Sanyuan Foods and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Beijing Sanyuan 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 Beijing Sanyuan with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Ningxia Younglight.
Diversification Opportunities for Beijing Sanyuan and Ningxia Younglight
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beijing and Ningxia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods and Ningxia Younglight Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Younglight and Beijing Sanyuan 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 Beijing Sanyuan Foods 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 Beijing Sanyuan i.e., Beijing Sanyuan and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and Ningxia Younglight
Assuming the 90 days trading horizon Beijing Sanyuan Foods is expected to under-perform the Ningxia Younglight. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Sanyuan Foods is 1.54 times less risky than Ningxia Younglight. The stock trades about -0.43 of its potential returns per unit of risk. The Ningxia Younglight Chemicals is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Ningxia Younglight Chemicals on October 17, 2024 and sell it today you would lose (88.00) from holding Ningxia Younglight Chemicals or give up 10.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Beijing Sanyuan Foods |
| Ningxia Younglight |
Beijing Sanyuan and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and Ningxia Younglight
The main advantage of trading using opposite Beijing Sanyuan and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan 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.| Beijing Sanyuan vs. Marssenger Kitchenware Co | Beijing Sanyuan vs. Shenzhen Noposion Agrochemicals | Beijing Sanyuan vs. Do Fluoride Chemicals Co | Beijing Sanyuan vs. Vats Liquor Chain |
| Ningxia Younglight vs. Chengdu Xingrong Investment | Ningxia Younglight vs. Zhongrun Resources Investment | Ningxia Younglight vs. Hunan Investment Group | Ningxia Younglight vs. Xiandai Investment Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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