Correlation Between Xiangyang Automobile and Shanghai Lingyun
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Shanghai Lingyun Industries, you can compare the effects of market volatilities on Xiangyang Automobile and Shanghai Lingyun 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 Shanghai Lingyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Shanghai Lingyun.
Diversification Opportunities for Xiangyang Automobile and Shanghai Lingyun
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiangyang and Shanghai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Shanghai Lingyun Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Lingyun Ind 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 Shanghai Lingyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Lingyun Ind has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Shanghai Lingyun go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Shanghai Lingyun
Assuming the 90 days trading horizon Xiangyang Automobile is expected to generate 3.9 times less return on investment than Shanghai Lingyun. But when comparing it to its historical volatility, Xiangyang Automobile Bearing is 1.24 times less risky than Shanghai Lingyun. It trades about 0.02 of its potential returns per unit of risk. Shanghai Lingyun Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Shanghai Lingyun Industries on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Shanghai Lingyun Industries or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Shanghai Lingyun Industries
Performance |
| Timeline |
| Xiangyang Automobile |
| Shanghai Lingyun Ind |
Xiangyang Automobile and Shanghai Lingyun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Shanghai Lingyun
The main advantage of trading using opposite Xiangyang Automobile and Shanghai Lingyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Shanghai Lingyun 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 Shanghai Lingyun will offset losses from the drop in Shanghai Lingyun's long position.| Xiangyang Automobile vs. Ming Yang Smart | Xiangyang Automobile vs. 159681 | Xiangyang Automobile vs. 159005 | Xiangyang Automobile vs. 516220 |
| Shanghai Lingyun vs. Sinosteel Engineering and | Shanghai Lingyun vs. Jiangxi JDL Environmental | Shanghai Lingyun vs. Guangdong Liantai Environmental | Shanghai Lingyun vs. Tianjin Capital Environmental |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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