Correlation Between Shenyang Chemical and Xilinmen Furniture
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By analyzing existing cross correlation between Shenyang Chemical Industry and Xilinmen Furniture Co, you can compare the effects of market volatilities on Shenyang Chemical 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 Shenyang Chemical with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Xilinmen Furniture.
Diversification Opportunities for Shenyang Chemical and Xilinmen Furniture
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Xilinmen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture and Shenyang Chemical 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 Shenyang Chemical Industry 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 Shenyang Chemical i.e., Shenyang Chemical and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Xilinmen Furniture
Assuming the 90 days trading horizon Shenyang Chemical is expected to generate 5.53 times less return on investment than Xilinmen Furniture. But when comparing it to its historical volatility, Shenyang Chemical Industry is 1.02 times less risky than Xilinmen Furniture. It trades about 0.0 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,940 in Xilinmen Furniture Co on September 3, 2024 and sell it today you would lose (45.00) from holding Xilinmen Furniture Co or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Shenyang Chemical |
| Xilinmen Furniture |
Shenyang Chemical and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Xilinmen Furniture
The main advantage of trading using opposite Shenyang Chemical and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical 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.| Shenyang Chemical vs. Zijin Mining Group | Shenyang Chemical vs. Baoshan Iron Steel | Shenyang Chemical vs. Rongsheng Petrochemical Co | Shenyang Chemical vs. Hoshine Silicon Ind |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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