Correlation Between XCMG Construction and Jiangsu Yueda
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By analyzing existing cross correlation between XCMG Construction Machinery and Jiangsu Yueda Investment, you can compare the effects of market volatilities on XCMG Construction and Jiangsu Yueda 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 Jiangsu Yueda. Check out your portfolio center. Please also check ongoing floating volatility patterns of XCMG Construction and Jiangsu Yueda.
Diversification Opportunities for XCMG Construction and Jiangsu Yueda
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between XCMG and Jiangsu is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding XCMG Construction Machinery and Jiangsu Yueda Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Yueda Investment 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 Jiangsu Yueda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Yueda Investment has no effect on the direction of XCMG Construction i.e., XCMG Construction and Jiangsu Yueda go up and down completely randomly.
Pair Corralation between XCMG Construction and Jiangsu Yueda
Assuming the 90 days trading horizon XCMG Construction is expected to generate 4.63 times less return on investment than Jiangsu Yueda. But when comparing it to its historical volatility, XCMG Construction Machinery is 1.2 times less risky than Jiangsu Yueda. It trades about 0.04 of its potential returns per unit of risk. Jiangsu Yueda Investment is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 463.00 in Jiangsu Yueda Investment on September 13, 2024 and sell it today you would earn a total of 28.00 from holding Jiangsu Yueda Investment or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
XCMG Construction Machinery vs. Jiangsu Yueda Investment
Performance |
| Timeline |
| XCMG Construction |
| Jiangsu Yueda Investment |
XCMG Construction and Jiangsu Yueda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XCMG Construction and Jiangsu Yueda
The main advantage of trading using opposite XCMG Construction and Jiangsu Yueda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XCMG Construction position performs unexpectedly, Jiangsu Yueda 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 Jiangsu Yueda will offset losses from the drop in Jiangsu Yueda's long position.| XCMG Construction vs. Hangzhou Gaoxin Rubber | XCMG Construction vs. Beijing Sanyuan Foods | XCMG Construction vs. Advanced Technology Materials | XCMG Construction vs. Xinjiang Tianrun Dairy |
| Jiangsu Yueda vs. Lutian Machinery Co | Jiangsu Yueda vs. China Longyuan Power | Jiangsu Yueda vs. PetroChina Co Ltd | Jiangsu Yueda vs. Bank of China |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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