Correlation Between Xiangyang Automobile and Shanghai Phichem
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Shanghai Phichem Material, you can compare the effects of market volatilities on Xiangyang Automobile and Shanghai Phichem 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 Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Shanghai Phichem.
Diversification Opportunities for Xiangyang Automobile and Shanghai Phichem
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xiangyang and Shanghai is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material 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 Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Shanghai Phichem go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Shanghai Phichem
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 2.19 times more return on investment than Shanghai Phichem. However, Xiangyang Automobile is 2.19 times more volatile than Shanghai Phichem Material. It trades about -0.03 of its potential returns per unit of risk. Shanghai Phichem Material is currently generating about -0.13 per unit of risk. If you would invest 668.00 in Xiangyang Automobile Bearing on October 18, 2024 and sell it today you would lose (39.00) from holding Xiangyang Automobile Bearing or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Shanghai Phichem Material
Performance |
| Timeline |
| Xiangyang Automobile |
| Shanghai Phichem Material |
Xiangyang Automobile and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Shanghai Phichem
The main advantage of trading using opposite Xiangyang Automobile and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Shanghai Phichem 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 Shanghai Phichem will offset losses from the drop in Shanghai Phichem's long position.The idea behind Xiangyang Automobile Bearing and Shanghai Phichem Material 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.
| Shanghai Phichem vs. Xiangyang Automobile Bearing | Shanghai Phichem vs. Bloomage Biotechnology Corp | Shanghai Phichem vs. Beijing Jiaman Dress | Shanghai Phichem vs. Air China Ltd |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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