Correlation Between XCMG Construction and Qijing Machinery
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By analyzing existing cross correlation between XCMG Construction Machinery and Qijing Machinery, you can compare the effects of market volatilities on XCMG Construction and Qijing Machinery 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 Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of XCMG Construction and Qijing Machinery.
Diversification Opportunities for XCMG Construction and Qijing Machinery
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between XCMG and Qijing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding XCMG Construction Machinery and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery 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 Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of XCMG Construction i.e., XCMG Construction and Qijing Machinery go up and down completely randomly.
Pair Corralation between XCMG Construction and Qijing Machinery
Assuming the 90 days trading horizon XCMG Construction Machinery is expected to generate 0.67 times more return on investment than Qijing Machinery. However, XCMG Construction Machinery is 1.49 times less risky than Qijing Machinery. It trades about 0.04 of its potential returns per unit of risk. Qijing Machinery is currently generating about -0.11 per unit of risk. If you would invest 765.00 in XCMG Construction Machinery on August 29, 2024 and sell it today you would earn a total of 10.00 from holding XCMG Construction Machinery or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
XCMG Construction Machinery vs. Qijing Machinery
Performance |
| Timeline |
| XCMG Construction |
| Qijing Machinery |
XCMG Construction and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XCMG Construction and Qijing Machinery
The main advantage of trading using opposite XCMG Construction and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XCMG Construction position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.| XCMG Construction vs. PetroChina Co Ltd | XCMG Construction vs. China State Construction | XCMG Construction vs. China Mobile Limited | XCMG Construction vs. Industrial and Commercial |
| Qijing Machinery vs. China State Construction | Qijing Machinery vs. Huafa Industrial Co | Qijing Machinery vs. China International Capital | Qijing Machinery vs. Kweichow Moutai 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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