Correlation Between Tengda Construction and Ningxia Younglight
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By analyzing existing cross correlation between Tengda Construction Group and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Tengda Construction 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 Tengda Construction with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tengda Construction and Ningxia Younglight.
Diversification Opportunities for Tengda Construction and Ningxia Younglight
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tengda and Ningxia is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tengda Construction Group and Ningxia Younglight Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Younglight and Tengda Construction 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 Tengda Construction Group 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 Tengda Construction i.e., Tengda Construction and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Tengda Construction and Ningxia Younglight
Assuming the 90 days trading horizon Tengda Construction is expected to generate 3.36 times less return on investment than Ningxia Younglight. But when comparing it to its historical volatility, Tengda Construction Group is 1.8 times less risky than Ningxia Younglight. It trades about 0.06 of its potential returns per unit of risk. Ningxia Younglight Chemicals is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 721.00 in Ningxia Younglight Chemicals on September 5, 2024 and sell it today you would earn a total of 119.00 from holding Ningxia Younglight Chemicals or generate 16.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tengda Construction Group vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Tengda Construction |
| Ningxia Younglight |
Tengda Construction and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tengda Construction and Ningxia Younglight
The main advantage of trading using opposite Tengda Construction and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tengda Construction 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.| Tengda Construction vs. China Life Insurance | Tengda Construction vs. Cinda Securities Co | Tengda Construction vs. Piotech Inc A | Tengda Construction vs. Dongxing Sec Co |
| Ningxia Younglight vs. Tengda Construction Group | Ningxia Younglight vs. Jiangsu Jinling Sports | Ningxia Younglight vs. Shantui Construction Machinery | Ningxia Younglight vs. Huitong Construction Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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