Correlation Between Tianneng Battery and Ningxia Younglight
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By analyzing existing cross correlation between Tianneng Battery Group and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Tianneng Battery 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 Tianneng Battery with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianneng Battery and Ningxia Younglight.
Diversification Opportunities for Tianneng Battery and Ningxia Younglight
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tianneng and Ningxia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tianneng Battery 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 Tianneng Battery 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 Tianneng Battery 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 Tianneng Battery i.e., Tianneng Battery and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Tianneng Battery and Ningxia Younglight
Assuming the 90 days trading horizon Tianneng Battery is expected to generate 2.16 times less return on investment than Ningxia Younglight. In addition to that, Tianneng Battery is 1.12 times more volatile than Ningxia Younglight Chemicals. It trades about 0.05 of its total potential returns per unit of risk. Ningxia Younglight Chemicals is currently generating about 0.11 per unit of volatility. If you would invest 619.00 in Ningxia Younglight Chemicals on September 5, 2024 and sell it today you would earn a total of 251.00 from holding Ningxia Younglight Chemicals or generate 40.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianneng Battery Group vs. Ningxia Younglight Chemicals
Performance |
| Timeline |
| Tianneng Battery |
| Ningxia Younglight |
Tianneng Battery and Ningxia Younglight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianneng Battery and Ningxia Younglight
The main advantage of trading using opposite Tianneng Battery and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianneng Battery 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 Tianneng Battery Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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