Correlation Between Xiangyang Automobile and Hubei Xingfa
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Xiangyang Automobile and Hubei Xingfa 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 Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Hubei Xingfa.
Diversification Opportunities for Xiangyang Automobile and Hubei Xingfa
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xiangyang and Hubei is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Hubei Xingfa
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 1.37 times more return on investment than Hubei Xingfa. However, Xiangyang Automobile is 1.37 times more volatile than Hubei Xingfa Chemicals. It trades about 0.09 of its potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about 0.09 per unit of risk. If you would invest 564.00 in Xiangyang Automobile Bearing on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Xiangyang Automobile Bearing or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Xiangyang Automobile |
| Hubei Xingfa Chemicals |
Xiangyang Automobile and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Hubei Xingfa
The main advantage of trading using opposite Xiangyang Automobile and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Hubei Xingfa 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 Hubei Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Xiangyang Automobile vs. BYD Co Ltd | Xiangyang Automobile vs. China Mobile Limited | Xiangyang Automobile vs. Agricultural Bank of | Xiangyang Automobile vs. Industrial and Commercial |
| Hubei Xingfa vs. Zijin Mining Group | Hubei Xingfa vs. Wanhua Chemical Group | Hubei Xingfa vs. Baoshan Iron Steel | Hubei Xingfa vs. Shandong Gold Mining |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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