Correlation Between Tibet Huayu and Ningxia Younglight
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By analyzing existing cross correlation between Tibet Huayu Mining and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Tibet Huayu 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 Tibet Huayu with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Ningxia Younglight.
Diversification Opportunities for Tibet Huayu and Ningxia Younglight
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tibet and Ningxia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu 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 Tibet Huayu 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 Tibet Huayu 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 Tibet Huayu i.e., Tibet Huayu and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Tibet Huayu and Ningxia Younglight
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to under-perform the Ningxia Younglight. But the stock apears to be less risky and, when comparing its historical volatility, Tibet Huayu Mining is 2.28 times less risky than Ningxia Younglight. The stock trades about -0.54 of its potential returns per unit of risk. The Ningxia Younglight Chemicals is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 888.00 in Ningxia Younglight Chemicals on October 13, 2024 and sell it today you would lose (167.00) from holding Ningxia Younglight Chemicals or give up 18.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Tibet Huayu Mining |
| Ningxia Younglight |
Tibet Huayu and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Ningxia Younglight
The main advantage of trading using opposite Tibet Huayu and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu 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.| Tibet Huayu vs. Jiajia Food Group | Tibet Huayu vs. Zhongshan Public Utilities | Tibet Huayu vs. Digiwin Software Co | Tibet Huayu vs. Ping An Insurance |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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