Correlation Between Xiangyang Automobile and Xiangyu Medical
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Xiangyu Medical Co, you can compare the effects of market volatilities on Xiangyang Automobile and Xiangyu Medical 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 Xiangyu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Xiangyu Medical.
Diversification Opportunities for Xiangyang Automobile and Xiangyu Medical
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xiangyang and Xiangyu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Xiangyu Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyu Medical 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 Xiangyu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyu Medical has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Xiangyu Medical go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Xiangyu Medical
Assuming the 90 days trading horizon Xiangyang Automobile is expected to generate 1.2 times less return on investment than Xiangyu Medical. In addition to that, Xiangyang Automobile is 1.43 times more volatile than Xiangyu Medical Co. It trades about 0.1 of its total potential returns per unit of risk. Xiangyu Medical Co is currently generating about 0.17 per unit of volatility. If you would invest 2,800 in Xiangyu Medical Co on November 7, 2024 and sell it today you would earn a total of 157.00 from holding Xiangyu Medical Co or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Xiangyu Medical Co
Performance |
| Timeline |
| Xiangyang Automobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xiangyu Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xiangyang Automobile and Xiangyu Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Xiangyu Medical
The main advantage of trading using opposite Xiangyang Automobile and Xiangyu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Xiangyu Medical 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 Xiangyu Medical will offset losses from the drop in Xiangyu Medical's long position.The idea behind Xiangyang Automobile Bearing and Xiangyu Medical Co 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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