Correlation Between China Greatwall and Ningxia Younglight
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By analyzing existing cross correlation between China Greatwall Computer and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on China Greatwall 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 China Greatwall with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Greatwall and Ningxia Younglight.
Diversification Opportunities for China Greatwall and Ningxia Younglight
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Ningxia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding China Greatwall Computer and Ningxia Younglight Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Younglight and China Greatwall 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 China Greatwall Computer 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 China Greatwall i.e., China Greatwall and Ningxia Younglight go up and down completely randomly.
Pair Corralation between China Greatwall and Ningxia Younglight
Assuming the 90 days trading horizon China Greatwall Computer is expected to generate 1.36 times more return on investment than Ningxia Younglight. However, China Greatwall is 1.36 times more volatile than Ningxia Younglight Chemicals. It trades about 0.07 of its potential returns per unit of risk. Ningxia Younglight Chemicals is currently generating about 0.02 per unit of risk. If you would invest 1,127 in China Greatwall Computer on October 6, 2024 and sell it today you would earn a total of 194.00 from holding China Greatwall Computer or generate 17.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Greatwall Computer vs. Ningxia Younglight Chemicals
Performance |
Timeline |
China Greatwall Computer |
Ningxia Younglight |
China Greatwall and Ningxia Younglight Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Greatwall and Ningxia Younglight
The main advantage of trading using opposite China Greatwall and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Greatwall 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.China Greatwall vs. Jinsanjiang Silicon Material | China Greatwall vs. Beijing Sanyuan Foods | China Greatwall vs. Qingdao Foods Co | China Greatwall vs. Xinke Material |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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