Correlation Between Xiandai Investment and Harbin Air
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By analyzing existing cross correlation between Xiandai Investment Co and Harbin Air Conditioning, you can compare the effects of market volatilities on Xiandai Investment and Harbin Air 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 Harbin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiandai Investment and Harbin Air.
Diversification Opportunities for Xiandai Investment and Harbin Air
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xiandai and Harbin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Xiandai Investment Co and Harbin Air Conditioning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbin Air Conditioning 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 Harbin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbin Air Conditioning has no effect on the direction of Xiandai Investment i.e., Xiandai Investment and Harbin Air go up and down completely randomly.
Pair Corralation between Xiandai Investment and Harbin Air
Assuming the 90 days trading horizon Xiandai Investment Co is expected to under-perform the Harbin Air. But the stock apears to be less risky and, when comparing its historical volatility, Xiandai Investment Co is 4.77 times less risky than Harbin Air. The stock trades about -0.07 of its potential returns per unit of risk. The Harbin Air Conditioning is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 443.00 in Harbin Air Conditioning on November 3, 2024 and sell it today you would earn a total of 3.00 from holding Harbin Air Conditioning or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiandai Investment Co vs. Harbin Air Conditioning
Performance |
| Timeline |
| Xiandai Investment |
| Harbin Air Conditioning |
Xiandai Investment and Harbin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiandai Investment and Harbin Air
The main advantage of trading using opposite Xiandai Investment and Harbin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiandai Investment position performs unexpectedly, Harbin Air 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 Harbin Air will offset losses from the drop in Harbin Air's long position.The idea behind Xiandai Investment Co and Harbin Air Conditioning pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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