Correlation Between Xiangyang Automobile and Qijing Machinery
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Qijing Machinery, you can compare the effects of market volatilities on Xiangyang Automobile and Qijing Machinery 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 Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Qijing Machinery.
Diversification Opportunities for Xiangyang Automobile and Qijing Machinery
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiangyang and Qijing is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery 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 Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Qijing Machinery go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Qijing Machinery
Assuming the 90 days trading horizon Xiangyang Automobile is expected to generate 1.22 times less return on investment than Qijing Machinery. But when comparing it to its historical volatility, Xiangyang Automobile Bearing is 1.07 times less risky than Qijing Machinery. It trades about 0.22 of its potential returns per unit of risk. Qijing Machinery is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,260 in Qijing Machinery on November 8, 2024 and sell it today you would earn a total of 175.00 from holding Qijing Machinery or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Qijing Machinery
Performance |
| Timeline |
| Xiangyang Automobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Qijing Machinery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xiangyang Automobile and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Qijing Machinery
The main advantage of trading using opposite Xiangyang Automobile and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.The idea behind Xiangyang Automobile Bearing and Qijing Machinery 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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