Correlation Between Pengxin International and Ningxia Younglight
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By analyzing existing cross correlation between Pengxin International Mining and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Pengxin International 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 Pengxin International with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Ningxia Younglight.
Diversification Opportunities for Pengxin International and Ningxia Younglight
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pengxin and Ningxia is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Ningxia Younglight Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Younglight and Pengxin International 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 Pengxin International Mining 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 Pengxin International i.e., Pengxin International and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Pengxin International and Ningxia Younglight
Assuming the 90 days trading horizon Pengxin International Mining is expected to generate 1.17 times more return on investment than Ningxia Younglight. However, Pengxin International is 1.17 times more volatile than Ningxia Younglight Chemicals. It trades about 0.12 of its potential returns per unit of risk. Ningxia Younglight Chemicals is currently generating about 0.09 per unit of risk. If you would invest 207.00 in Pengxin International Mining on December 4, 2024 and sell it today you would earn a total of 116.00 from holding Pengxin International Mining or generate 56.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Pengxin International |
| Ningxia Younglight |
Pengxin International and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Ningxia Younglight
The main advantage of trading using opposite Pengxin International and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International 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.The idea behind Pengxin International Mining and Ningxia Younglight Chemicals 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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