Correlation Between Xiwang Foodstuffs and New China
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By analyzing existing cross correlation between Xiwang Foodstuffs Co and New China Life, you can compare the effects of market volatilities on Xiwang Foodstuffs and New China 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 Xiwang Foodstuffs with a short position of New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiwang Foodstuffs and New China.
Diversification Opportunities for Xiwang Foodstuffs and New China
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiwang and New is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xiwang Foodstuffs Co and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life and Xiwang Foodstuffs 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 Xiwang Foodstuffs Co are associated (or correlated) with New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Xiwang Foodstuffs i.e., Xiwang Foodstuffs and New China go up and down completely randomly.
Pair Corralation between Xiwang Foodstuffs and New China
Assuming the 90 days trading horizon Xiwang Foodstuffs Co is expected to generate 1.59 times more return on investment than New China. However, Xiwang Foodstuffs is 1.59 times more volatile than New China Life. It trades about 0.09 of its potential returns per unit of risk. New China Life is currently generating about -0.02 per unit of risk. If you would invest 441.00 in Xiwang Foodstuffs Co on September 13, 2024 and sell it today you would earn a total of 29.00 from holding Xiwang Foodstuffs Co or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiwang Foodstuffs Co vs. New China Life
Performance |
| Timeline |
| Xiwang Foodstuffs |
| New China Life |
Xiwang Foodstuffs and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiwang Foodstuffs and New China
The main advantage of trading using opposite Xiwang Foodstuffs and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiwang Foodstuffs position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| Xiwang Foodstuffs vs. Nanjing Putian Telecommunications | Xiwang Foodstuffs vs. Tianjin Realty Development | Xiwang Foodstuffs vs. Kangyue Technology Co | Xiwang Foodstuffs vs. Shenzhen Hifuture Electric |
| New China vs. Jointo Energy Investment | New China vs. Tonghua Grape Wine | New China vs. Citic Guoan Wine | New China vs. Keda Clean Energy |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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