Correlation Between Ningxia Younglight and Jilin Chemical
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Jilin Chemical Fibre, you can compare the effects of market volatilities on Ningxia Younglight and Jilin 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 Ningxia Younglight with a short position of Jilin Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Jilin Chemical.
Diversification Opportunities for Ningxia Younglight and Jilin Chemical
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningxia and Jilin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Jilin Chemical Fibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Chemical Fibre and Ningxia Younglight 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 Ningxia Younglight Chemicals are associated (or correlated) with Jilin Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Chemical Fibre has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Jilin Chemical go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Jilin Chemical
Assuming the 90 days trading horizon Ningxia Younglight is expected to generate 1.07 times less return on investment than Jilin Chemical. But when comparing it to its historical volatility, Ningxia Younglight Chemicals is 1.0 times less risky than Jilin Chemical. It trades about 0.22 of its potential returns per unit of risk. Jilin Chemical Fibre is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 274.00 in Jilin Chemical Fibre on September 13, 2024 and sell it today you would earn a total of 153.00 from holding Jilin Chemical Fibre or generate 55.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ningxia Younglight Chemicals vs. Jilin Chemical Fibre
Performance |
Timeline |
Ningxia Younglight |
Jilin Chemical Fibre |
Ningxia Younglight and Jilin Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningxia Younglight and Jilin Chemical
The main advantage of trading using opposite Ningxia Younglight and Jilin Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Jilin 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 Jilin Chemical will offset losses from the drop in Jilin Chemical's long position.Ningxia Younglight vs. Zijin Mining Group | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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