Correlation Between Xiandai Investment and Lecron Energy
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By analyzing existing cross correlation between Xiandai Investment Co and Lecron Energy Saving, you can compare the effects of market volatilities on Xiandai Investment and Lecron Energy 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 Lecron Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiandai Investment and Lecron Energy.
Diversification Opportunities for Xiandai Investment and Lecron Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiandai and Lecron is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xiandai Investment Co and Lecron Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lecron Energy Saving 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 Lecron Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lecron Energy Saving has no effect on the direction of Xiandai Investment i.e., Xiandai Investment and Lecron Energy go up and down completely randomly.
Pair Corralation between Xiandai Investment and Lecron Energy
Assuming the 90 days trading horizon Xiandai Investment is expected to generate 11.14 times less return on investment than Lecron Energy. But when comparing it to its historical volatility, Xiandai Investment Co is 2.46 times less risky than Lecron Energy. It trades about 0.04 of its potential returns per unit of risk. Lecron Energy Saving is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 524.00 in Lecron Energy Saving on November 4, 2024 and sell it today you would earn a total of 46.00 from holding Lecron Energy Saving or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiandai Investment Co vs. Lecron Energy Saving
Performance |
| Timeline |
| Xiandai Investment |
| Lecron Energy Saving |
Xiandai Investment and Lecron Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiandai Investment and Lecron Energy
The main advantage of trading using opposite Xiandai Investment and Lecron Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiandai Investment position performs unexpectedly, Lecron Energy 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 Lecron Energy will offset losses from the drop in Lecron Energy's long position.| Xiandai Investment vs. BTG Hotels Group | Xiandai Investment vs. Guangzhou Dongfang Hotel | Xiandai Investment vs. Guangxi Wuzhou Communications | Xiandai Investment vs. Jinling Hotel Corp |
| Lecron Energy vs. Ningbo Tech Bank Co | Lecron Energy vs. Bank of Suzhou | Lecron Energy vs. Ping An Insurance | Lecron Energy vs. HeNan Splendor Science |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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