Correlation Between Zhongzhu Medical and Ningxia Younglight
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By analyzing existing cross correlation between Zhongzhu Medical Holdings and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Zhongzhu Medical 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 Zhongzhu Medical with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongzhu Medical and Ningxia Younglight.
Diversification Opportunities for Zhongzhu Medical and Ningxia Younglight
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongzhu and Ningxia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Zhongzhu Medical Holdings and Ningxia Younglight Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Younglight and Zhongzhu Medical 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 Zhongzhu Medical Holdings 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 Zhongzhu Medical i.e., Zhongzhu Medical and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Zhongzhu Medical and Ningxia Younglight
Assuming the 90 days trading horizon Zhongzhu Medical Holdings is expected to under-perform the Ningxia Younglight. But the stock apears to be less risky and, when comparing its historical volatility, Zhongzhu Medical Holdings is 1.98 times less risky than Ningxia Younglight. The stock trades about -0.37 of its potential returns per unit of risk. The Ningxia Younglight Chemicals is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Ningxia Younglight Chemicals on October 16, 2024 and sell it today you would lose (133.00) from holding Ningxia Younglight Chemicals or give up 15.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongzhu Medical Holdings vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Zhongzhu Medical Holdings |
| Ningxia Younglight |
Zhongzhu Medical and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongzhu Medical and Ningxia Younglight
The main advantage of trading using opposite Zhongzhu Medical and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongzhu Medical 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.| Zhongzhu Medical vs. Harbin Hatou Investment | Zhongzhu Medical vs. TianJin 712 Communication | Zhongzhu Medical vs. Chengdu Xingrong Investment | Zhongzhu Medical vs. Zhangjiagang Freetrade Science |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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