Correlation Between XCMG Construction and Long Yuan
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By analyzing existing cross correlation between XCMG Construction Machinery and Long Yuan Construction, you can compare the effects of market volatilities on XCMG Construction and Long Yuan 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 XCMG Construction with a short position of Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of XCMG Construction and Long Yuan.
Diversification Opportunities for XCMG Construction and Long Yuan
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XCMG and Long is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding XCMG Construction Machinery and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction and XCMG Construction 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 XCMG Construction Machinery are associated (or correlated) with Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of XCMG Construction i.e., XCMG Construction and Long Yuan go up and down completely randomly.
Pair Corralation between XCMG Construction and Long Yuan
Assuming the 90 days trading horizon XCMG Construction Machinery is expected to generate 0.63 times more return on investment than Long Yuan. However, XCMG Construction Machinery is 1.58 times less risky than Long Yuan. It trades about 0.0 of its potential returns per unit of risk. Long Yuan Construction is currently generating about -0.04 per unit of risk. If you would invest 775.00 in XCMG Construction Machinery on October 26, 2024 and sell it today you would lose (8.00) from holding XCMG Construction Machinery or give up 1.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
XCMG Construction Machinery vs. Long Yuan Construction
Performance |
Timeline |
XCMG Construction |
Long Yuan Construction |
XCMG Construction and Long Yuan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with XCMG Construction and Long Yuan
The main advantage of trading using opposite XCMG Construction and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XCMG Construction position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.XCMG Construction vs. Xizi Clean Energy | XCMG Construction vs. Jiangsu Broadcasting Cable | XCMG Construction vs. Heilongjiang Transport Development | XCMG Construction vs. China Aluminum International |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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