Correlation Between Xiangyang Automobile and Jiangsu Phoenix
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Jiangsu Phoenix Publishing, you can compare the effects of market volatilities on Xiangyang Automobile and Jiangsu Phoenix 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 Jiangsu Phoenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Jiangsu Phoenix.
Diversification Opportunities for Xiangyang Automobile and Jiangsu Phoenix
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xiangyang and Jiangsu is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Jiangsu Phoenix Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Phoenix Publ 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 Jiangsu Phoenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Phoenix Publ has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Jiangsu Phoenix go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Jiangsu Phoenix
Assuming the 90 days trading horizon Xiangyang Automobile is expected to generate 2.09 times less return on investment than Jiangsu Phoenix. In addition to that, Xiangyang Automobile is 1.31 times more volatile than Jiangsu Phoenix Publishing. It trades about 0.01 of its total potential returns per unit of risk. Jiangsu Phoenix Publishing is currently generating about 0.04 per unit of volatility. If you would invest 741.00 in Jiangsu Phoenix Publishing on September 3, 2024 and sell it today you would earn a total of 306.00 from holding Jiangsu Phoenix Publishing or generate 41.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Jiangsu Phoenix Publishing
Performance |
| Timeline |
| Xiangyang Automobile |
| Jiangsu Phoenix Publ |
Xiangyang Automobile and Jiangsu Phoenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Jiangsu Phoenix
The main advantage of trading using opposite Xiangyang Automobile and Jiangsu Phoenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Jiangsu Phoenix 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 Jiangsu Phoenix will offset losses from the drop in Jiangsu Phoenix's long position.The idea behind Xiangyang Automobile Bearing and Jiangsu Phoenix Publishing 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.
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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