Correlation Between Xiangyang Automobile and Shanxi Xishan
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Shanxi Xishan Coal, you can compare the effects of market volatilities on Xiangyang Automobile and Shanxi Xishan 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 Xiangyang Automobile with a short position of Shanxi Xishan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Shanxi Xishan.
Diversification Opportunities for Xiangyang Automobile and Shanxi Xishan
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiangyang and Shanxi is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Shanxi Xishan Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Xishan Coal and Xiangyang Automobile 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 Xiangyang Automobile Bearing are associated (or correlated) with Shanxi Xishan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Xishan Coal has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Shanxi Xishan go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Shanxi Xishan
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 2.6 times more return on investment than Shanxi Xishan. However, Xiangyang Automobile is 2.6 times more volatile than Shanxi Xishan Coal. It trades about 0.08 of its potential returns per unit of risk. Shanxi Xishan Coal is currently generating about -0.11 per unit of risk. If you would invest 552.00 in Xiangyang Automobile Bearing on August 25, 2024 and sell it today you would earn a total of 30.00 from holding Xiangyang Automobile Bearing or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Shanxi Xishan Coal
Performance |
| Timeline |
| Xiangyang Automobile |
| Shanxi Xishan Coal |
Xiangyang Automobile and Shanxi Xishan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Shanxi Xishan
The main advantage of trading using opposite Xiangyang Automobile and Shanxi Xishan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Shanxi Xishan 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 Shanxi Xishan will offset losses from the drop in Shanxi Xishan's long position.| Xiangyang Automobile vs. Hainan Haiqi Transportation | Xiangyang Automobile vs. China Sports Industry | Xiangyang Automobile vs. Guangdong Brandmax Marketing | Xiangyang Automobile vs. Yindu Kitchen Equipment |
| Shanxi Xishan vs. Zhejiang Kingland Pipeline | Shanxi Xishan vs. Xiangyang Automobile Bearing | Shanxi Xishan vs. Suzhou Novoprotein Scientific | Shanxi Xishan vs. COL Digital Publishing |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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