Correlation Between Hunan Investment and Ningxia Younglight
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By analyzing existing cross correlation between Hunan Investment Group and Ningxia Younglight Chemicals, you can compare the effects of market volatilities on Hunan Investment 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 Hunan Investment with a short position of Ningxia Younglight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and Ningxia Younglight.
Diversification Opportunities for Hunan Investment and Ningxia Younglight
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hunan and Ningxia is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment 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 Hunan Investment 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 Hunan Investment 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 Hunan Investment i.e., Hunan Investment and Ningxia Younglight go up and down completely randomly.
Pair Corralation between Hunan Investment and Ningxia Younglight
Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 0.79 times more return on investment than Ningxia Younglight. However, Hunan Investment Group is 1.27 times less risky than Ningxia Younglight. It trades about 0.03 of its potential returns per unit of risk. Ningxia Younglight Chemicals is currently generating about -0.05 per unit of risk. If you would invest 506.00 in Hunan Investment Group on October 31, 2024 and sell it today you would earn a total of 19.00 from holding Hunan Investment Group or generate 3.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hunan Investment Group vs. Ningxia Younglight Chemicals
Performance |
Timeline |
Hunan Investment |
Ningxia Younglight |
Hunan Investment and Ningxia Younglight Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hunan Investment and Ningxia Younglight
The main advantage of trading using opposite Hunan Investment and Ningxia Younglight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment 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.Hunan Investment vs. Beijing Sanyuan Foods | ||
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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