Correlation Between Ningxia Younglight and Beijing Kingsoft
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Beijing Kingsoft Office, you can compare the effects of market volatilities on Ningxia Younglight and Beijing Kingsoft 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 Beijing Kingsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Beijing Kingsoft.
Diversification Opportunities for Ningxia Younglight and Beijing Kingsoft
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningxia and Beijing is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Beijing Kingsoft Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Kingsoft Office 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 Beijing Kingsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Kingsoft Office has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Beijing Kingsoft go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Beijing Kingsoft
Assuming the 90 days trading horizon Ningxia Younglight is expected to generate 2.13 times less return on investment than Beijing Kingsoft. But when comparing it to its historical volatility, Ningxia Younglight Chemicals is 1.09 times less risky than Beijing Kingsoft. It trades about 0.09 of its potential returns per unit of risk. Beijing Kingsoft Office is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 27,899 in Beijing Kingsoft Office on September 20, 2024 and sell it today you would earn a total of 3,499 from holding Beijing Kingsoft Office or generate 12.54% 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. Beijing Kingsoft Office
Performance |
Timeline |
Ningxia Younglight |
Beijing Kingsoft Office |
Ningxia Younglight and Beijing Kingsoft Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningxia Younglight and Beijing Kingsoft
The main advantage of trading using opposite Ningxia Younglight and Beijing Kingsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Beijing Kingsoft 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 Beijing Kingsoft will offset losses from the drop in Beijing Kingsoft'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 |
Beijing Kingsoft vs. Fujian Longzhou Transportation | Beijing Kingsoft vs. Anhui Transport Consulting | Beijing Kingsoft vs. Miracll Chemicals Co | Beijing Kingsoft vs. Ningxia Younglight Chemicals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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