Correlation Between Xian International and Pengxin International
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By analyzing existing cross correlation between Xian International Medical and Pengxin International Mining, you can compare the effects of market volatilities on Xian International and Pengxin International 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 Xian International with a short position of Pengxin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xian International and Pengxin International.
Diversification Opportunities for Xian International and Pengxin International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xian and Pengxin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Xian International Medical and Pengxin International Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengxin International and Xian International 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 Xian International Medical are associated (or correlated) with Pengxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengxin International has no effect on the direction of Xian International i.e., Xian International and Pengxin International go up and down completely randomly.
Pair Corralation between Xian International and Pengxin International
Assuming the 90 days trading horizon Xian International Medical is expected to generate 1.25 times more return on investment than Pengxin International. However, Xian International is 1.25 times more volatile than Pengxin International Mining. It trades about 0.2 of its potential returns per unit of risk. Pengxin International Mining is currently generating about -0.04 per unit of risk. If you would invest 528.00 in Xian International Medical on September 2, 2024 and sell it today you would earn a total of 92.00 from holding Xian International Medical or generate 17.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xian International Medical vs. Pengxin International Mining
Performance |
| Timeline |
| Xian International |
| Pengxin International |
Xian International and Pengxin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xian International and Pengxin International
The main advantage of trading using opposite Xian International and Pengxin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xian International position performs unexpectedly, Pengxin International 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 Pengxin International will offset losses from the drop in Pengxin International's long position.| Xian International vs. Dalian Zeus Entertainment | Xian International vs. Shenzhen Kexin Communication | Xian International vs. Threes Company Media | Xian International vs. Eastern Communications 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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