Correlation Between Ningxia Younglight and Elite Color
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Elite Color Environmental, you can compare the effects of market volatilities on Ningxia Younglight and Elite Color 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 Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Elite Color.
Diversification Opportunities for Ningxia Younglight and Elite Color
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningxia and Elite is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental 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 Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Elite Color go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Elite Color
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.33 times more return on investment than Elite Color. However, Ningxia Younglight is 1.33 times more volatile than Elite Color Environmental. It trades about 0.16 of its potential returns per unit of risk. Elite Color Environmental is currently generating about -0.24 per unit of risk. If you would invest 832.00 in Ningxia Younglight Chemicals on September 26, 2024 and sell it today you would earn a total of 90.00 from holding Ningxia Younglight Chemicals or generate 10.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningxia Younglight Chemicals vs. Elite Color Environmental
Performance |
Timeline |
Ningxia Younglight |
Elite Color Environmental |
Ningxia Younglight and Elite Color Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningxia Younglight and Elite Color
The main advantage of trading using opposite Ningxia Younglight and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color's long position.Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Wanhua Chemical Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Shandong Gold Mining |
Elite Color vs. Zijin Mining Group | Elite Color vs. Baoshan Iron Steel | Elite Color vs. Shandong Gold Mining | Elite Color vs. Rongsheng Petrochemical Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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