Correlation Between Xiandai Investment and HeNan Splendor
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By analyzing existing cross correlation between Xiandai Investment Co and HeNan Splendor Science, you can compare the effects of market volatilities on Xiandai Investment and HeNan Splendor 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 Xiandai Investment with a short position of HeNan Splendor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiandai Investment and HeNan Splendor.
Diversification Opportunities for Xiandai Investment and HeNan Splendor
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xiandai and HeNan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Xiandai Investment Co and HeNan Splendor Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeNan Splendor Science and Xiandai Investment 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 Xiandai Investment Co are associated (or correlated) with HeNan Splendor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeNan Splendor Science has no effect on the direction of Xiandai Investment i.e., Xiandai Investment and HeNan Splendor go up and down completely randomly.
Pair Corralation between Xiandai Investment and HeNan Splendor
Assuming the 90 days trading horizon Xiandai Investment is expected to generate 1.33 times less return on investment than HeNan Splendor. But when comparing it to its historical volatility, Xiandai Investment Co is 1.8 times less risky than HeNan Splendor. It trades about 0.05 of its potential returns per unit of risk. HeNan Splendor Science is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,019 in HeNan Splendor Science on November 28, 2024 and sell it today you would earn a total of 110.00 from holding HeNan Splendor Science or generate 10.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiandai Investment Co vs. HeNan Splendor Science
Performance |
| Timeline |
| Xiandai Investment |
| HeNan Splendor Science |
Xiandai Investment and HeNan Splendor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiandai Investment and HeNan Splendor
The main advantage of trading using opposite Xiandai Investment and HeNan Splendor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiandai Investment position performs unexpectedly, HeNan Splendor 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 HeNan Splendor will offset losses from the drop in HeNan Splendor's long position.| Xiandai Investment vs. Yinbang Clad Material | Xiandai Investment vs. Wankai New Materials | Xiandai Investment vs. Hua Hong Semiconductor | Xiandai Investment vs. Suzhou Xingye Material |
| HeNan Splendor vs. Yankershop Food Co | HeNan Splendor vs. Hygon Information Technology | HeNan Splendor vs. Suzhou Douson Drilling | HeNan Splendor vs. Gan Yuan Foods |
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