Correlation Between Xiandai Investment and Changjiang Jinggong
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By analyzing existing cross correlation between Xiandai Investment Co and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Xiandai Investment and Changjiang Jinggong 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 Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiandai Investment and Changjiang Jinggong.
Diversification Opportunities for Xiandai Investment and Changjiang Jinggong
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiandai and Changjiang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Xiandai Investment Co and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel 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 Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of Xiandai Investment i.e., Xiandai Investment and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between Xiandai Investment and Changjiang Jinggong
Assuming the 90 days trading horizon Xiandai Investment Co is expected to generate 1.63 times more return on investment than Changjiang Jinggong. However, Xiandai Investment is 1.63 times more volatile than Changjiang Jinggong Steel. It trades about 0.21 of its potential returns per unit of risk. Changjiang Jinggong Steel is currently generating about 0.06 per unit of risk. If you would invest 404.00 in Xiandai Investment Co on August 30, 2024 and sell it today you would earn a total of 53.00 from holding Xiandai Investment Co or generate 13.12% 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. Changjiang Jinggong Steel
Performance |
| Timeline |
| Xiandai Investment |
| Changjiang Jinggong Steel |
Xiandai Investment and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiandai Investment and Changjiang Jinggong
The main advantage of trading using opposite Xiandai Investment and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiandai Investment position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| Xiandai Investment vs. Industrial and Commercial | Xiandai Investment vs. Agricultural Bank of | Xiandai Investment vs. China Construction Bank | Xiandai Investment vs. Bank of China |
| Changjiang Jinggong vs. Shenzhen MTC Co | Changjiang Jinggong vs. Ming Yang Smart | Changjiang Jinggong vs. Changzhou Almaden Co | Changjiang Jinggong vs. 159681 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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