Correlation Between Maoming Petro and Xilinmen Furniture
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Xilinmen Furniture Co, you can compare the effects of market volatilities on Maoming Petro and Xilinmen Furniture 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 Maoming Petro with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Xilinmen Furniture.
Diversification Opportunities for Maoming Petro and Xilinmen Furniture
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Maoming and Xilinmen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture and Maoming Petro 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 Maoming Petro Chemical Shihua are associated (or correlated) with Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Maoming Petro i.e., Maoming Petro and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Maoming Petro and Xilinmen Furniture
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to generate 1.12 times more return on investment than Xilinmen Furniture. However, Maoming Petro is 1.12 times more volatile than Xilinmen Furniture Co. It trades about 0.17 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.06 per unit of risk. If you would invest 365.00 in Maoming Petro Chemical Shihua on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Maoming Petro Chemical Shihua or generate 9.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Maoming Petro Chemical |
| Xilinmen Furniture |
Maoming Petro and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Xilinmen Furniture
The main advantage of trading using opposite Maoming Petro and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture's long position.| Maoming Petro vs. Zijin Mining Group | Maoming Petro vs. Baoshan Iron Steel | Maoming Petro vs. Rongsheng Petrochemical Co | Maoming Petro vs. Hoshine Silicon Ind |
| Xilinmen Furniture vs. Tongxing Environmental Protection | Xilinmen Furniture vs. Ningbo Ligong Online | Xilinmen Furniture vs. Guangdong Advertising Co | Xilinmen Furniture vs. Bengang Steel Plates |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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