Correlation Between Xiangyang Automobile and Yindu Kitchen
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Yindu Kitchen Equipment, you can compare the effects of market volatilities on Xiangyang Automobile and Yindu Kitchen 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 Yindu Kitchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Yindu Kitchen.
Diversification Opportunities for Xiangyang Automobile and Yindu Kitchen
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xiangyang and Yindu is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Yindu Kitchen Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yindu Kitchen Equipment 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 Yindu Kitchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yindu Kitchen Equipment has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Yindu Kitchen go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Yindu Kitchen
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 1.82 times more return on investment than Yindu Kitchen. However, Xiangyang Automobile is 1.82 times more volatile than Yindu Kitchen Equipment. It trades about 0.04 of its potential returns per unit of risk. Yindu Kitchen Equipment is currently generating about -0.02 per unit of risk. If you would invest 523.00 in Xiangyang Automobile Bearing on November 7, 2024 and sell it today you would earn a total of 89.00 from holding Xiangyang Automobile Bearing or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Yindu Kitchen Equipment
Performance |
| Timeline |
| Xiangyang Automobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Yindu Kitchen Equipment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Xiangyang Automobile and Yindu Kitchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Yindu Kitchen
The main advantage of trading using opposite Xiangyang Automobile and Yindu Kitchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Yindu Kitchen 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 Yindu Kitchen will offset losses from the drop in Yindu Kitchen's long position.The idea behind Xiangyang Automobile Bearing and Yindu Kitchen Equipment 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.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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