Correlation Between Xiangyang Automobile and China Southern
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and China Southern Airlines, you can compare the effects of market volatilities on Xiangyang Automobile and China Southern 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 China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and China Southern.
Diversification Opportunities for Xiangyang Automobile and China Southern
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiangyang and China is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and China Southern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern Airlines 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 China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern Airlines has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and China Southern go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and China Southern
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 2.01 times more return on investment than China Southern. However, Xiangyang Automobile is 2.01 times more volatile than China Southern Airlines. It trades about 0.13 of its potential returns per unit of risk. China Southern Airlines is currently generating about 0.07 per unit of risk. If you would invest 391.00 in Xiangyang Automobile Bearing on September 5, 2024 and sell it today you would earn a total of 245.00 from holding Xiangyang Automobile Bearing or generate 62.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. China Southern Airlines
Performance |
| Timeline |
| Xiangyang Automobile |
| China Southern Airlines |
Xiangyang Automobile and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and China Southern
The main advantage of trading using opposite Xiangyang Automobile and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, China Southern 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 China Southern will offset losses from the drop in China Southern's long position.| Xiangyang Automobile vs. Hangzhou Gaoxin Rubber | Xiangyang Automobile vs. Jiangnan Mould Plastic | Xiangyang Automobile vs. Anji Foodstuff Co | Xiangyang Automobile vs. Ligao Foods CoLtd |
| China Southern vs. Xiangyang Automobile Bearing | China Southern vs. Guangdong Marubi Biotechnology | China Southern vs. Jinhe Biotechnology Co | China Southern vs. Dongfeng Automobile Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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