Correlation Between Ningbo Fujia and Xilong Chemical
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By analyzing existing cross correlation between Ningbo Fujia Industrial and Xilong Chemical Co, you can compare the effects of market volatilities on Ningbo Fujia and Xilong Chemical 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 Ningbo Fujia with a short position of Xilong Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fujia and Xilong Chemical.
Diversification Opportunities for Ningbo Fujia and Xilong Chemical
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ningbo and Xilong is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fujia Industrial and Xilong Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilong Chemical and Ningbo Fujia 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 Ningbo Fujia Industrial are associated (or correlated) with Xilong Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilong Chemical has no effect on the direction of Ningbo Fujia i.e., Ningbo Fujia and Xilong Chemical go up and down completely randomly.
Pair Corralation between Ningbo Fujia and Xilong Chemical
Assuming the 90 days trading horizon Ningbo Fujia Industrial is expected to generate 0.89 times more return on investment than Xilong Chemical. However, Ningbo Fujia Industrial is 1.12 times less risky than Xilong Chemical. It trades about 0.03 of its potential returns per unit of risk. Xilong Chemical Co is currently generating about 0.02 per unit of risk. If you would invest 1,170 in Ningbo Fujia Industrial on November 7, 2024 and sell it today you would earn a total of 305.00 from holding Ningbo Fujia Industrial or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fujia Industrial vs. Xilong Chemical Co
Performance |
| Timeline |
| Ningbo Fujia Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Xilong Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ningbo Fujia and Xilong Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fujia and Xilong Chemical
The main advantage of trading using opposite Ningbo Fujia and Xilong Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fujia position performs unexpectedly, Xilong Chemical 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 Xilong Chemical will offset losses from the drop in Xilong Chemical's long position.The idea behind Ningbo Fujia Industrial and Xilong Chemical Co 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.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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