Correlation Between Shantui Construction and Xilinmen Furniture
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By analyzing existing cross correlation between Shantui Construction Machinery and Xilinmen Furniture Co, you can compare the effects of market volatilities on Shantui Construction and Xilinmen Furniture 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 Shantui Construction with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shantui Construction and Xilinmen Furniture.
Diversification Opportunities for Shantui Construction and Xilinmen Furniture
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shantui and Xilinmen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shantui Construction Machinery and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture and Shantui Construction 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 Shantui Construction Machinery are associated (or correlated) with Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Shantui Construction i.e., Shantui Construction and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Shantui Construction and Xilinmen Furniture
Assuming the 90 days trading horizon Shantui Construction Machinery is expected to generate 1.41 times more return on investment than Xilinmen Furniture. However, Shantui Construction is 1.41 times more volatile than Xilinmen Furniture Co. It trades about 0.22 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.11 per unit of risk. If you would invest 893.00 in Shantui Construction Machinery on September 1, 2024 and sell it today you would earn a total of 150.00 from holding Shantui Construction Machinery or generate 16.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shantui Construction Machinery vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Shantui Construction |
| Xilinmen Furniture |
Shantui Construction and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shantui Construction and Xilinmen Furniture
The main advantage of trading using opposite Shantui Construction and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shantui Construction position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture's long position.| Shantui Construction vs. Kweichow Moutai Co | Shantui Construction vs. NAURA Technology Group | Shantui Construction vs. Zhejiang Orient Gene | Shantui Construction vs. APT Medical |
| Xilinmen Furniture vs. Shenyang Chemical Industry | Xilinmen Furniture vs. Yangmei Chemical Co | Xilinmen Furniture vs. Ye Chiu Metal | Xilinmen Furniture vs. Maoming Petro Chemical Shihua |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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