Correlation Between Ningxia Younglight and Hongfa Technology
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Hongfa Technology Co, you can compare the effects of market volatilities on Ningxia Younglight and Hongfa Technology 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 Hongfa Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Hongfa Technology.
Diversification Opportunities for Ningxia Younglight and Hongfa Technology
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ningxia and Hongfa is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Hongfa Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongfa Technology 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 Hongfa Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongfa Technology has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Hongfa Technology go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Hongfa Technology
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to under-perform the Hongfa Technology. In addition to that, Ningxia Younglight is 2.59 times more volatile than Hongfa Technology Co. It trades about -0.15 of its total potential returns per unit of risk. Hongfa Technology Co is currently generating about -0.12 per unit of volatility. If you would invest 3,201 in Hongfa Technology Co on October 5, 2024 and sell it today you would lose (142.00) from holding Hongfa Technology Co or give up 4.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningxia Younglight Chemicals vs. Hongfa Technology Co
Performance |
Timeline |
Ningxia Younglight |
Hongfa Technology |
Ningxia Younglight and Hongfa Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningxia Younglight and Hongfa Technology
The main advantage of trading using opposite Ningxia Younglight and Hongfa Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Hongfa Technology 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 Hongfa Technology will offset losses from the drop in Hongfa Technology'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 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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