Correlation Between Xian International and Ming Yang
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By analyzing existing cross correlation between Xian International Medical and Ming Yang Smart, you can compare the effects of market volatilities on Xian International and Ming Yang 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 Ming Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xian International and Ming Yang.
Diversification Opportunities for Xian International and Ming Yang
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xian and Ming is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Xian International Medical and Ming Yang Smart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Yang Smart 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 Ming Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Yang Smart has no effect on the direction of Xian International i.e., Xian International and Ming Yang go up and down completely randomly.
Pair Corralation between Xian International and Ming Yang
Assuming the 90 days trading horizon Xian International Medical is expected to generate 1.01 times more return on investment than Ming Yang. However, Xian International is 1.01 times more volatile than Ming Yang Smart. It trades about -0.3 of its potential returns per unit of risk. Ming Yang Smart is currently generating about -0.36 per unit of risk. If you would invest 583.00 in Xian International Medical on October 18, 2024 and sell it today you would lose (87.00) from holding Xian International Medical or give up 14.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xian International Medical vs. Ming Yang Smart
Performance |
| Timeline |
| Xian International |
| Ming Yang Smart |
Xian International and Ming Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xian International and Ming Yang
The main advantage of trading using opposite Xian International and Ming Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xian International position performs unexpectedly, Ming Yang 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 Ming Yang will offset losses from the drop in Ming Yang's long position.The idea behind Xian International Medical and Ming Yang Smart pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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