Correlation Between China Securities and Xilinmen Furniture
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By analyzing existing cross correlation between China Securities 800 and Xilinmen Furniture Co, you can compare the effects of market volatilities on China Securities 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 China Securities with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Xilinmen Furniture.
Diversification Opportunities for China Securities and Xilinmen Furniture
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Xilinmen is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture and China Securities 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 China Securities 800 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 China Securities i.e., China Securities and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between China Securities and Xilinmen Furniture
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.6 times more return on investment than Xilinmen Furniture. However, China Securities 800 is 1.68 times less risky than Xilinmen Furniture. It trades about -0.02 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.06 per unit of risk. If you would invest 427,236 in China Securities 800 on September 3, 2024 and sell it today you would lose (3,700) from holding China Securities 800 or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Xilinmen Furniture Co
Performance |
| Timeline |
China Securities and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Xilinmen Furniture Co
Pair trading matchups for Xilinmen Furniture
Pair Trading with China Securities and Xilinmen Furniture
The main advantage of trading using opposite China Securities and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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.| China Securities vs. Guilin Seamild Foods | China Securities vs. HaiXin Foods Co | China Securities vs. Zhejiang Publishing Media | China Securities vs. Eastroc Beverage Group |
| Xilinmen Furniture vs. Tongxing Environmental Protection | Xilinmen Furniture vs. Ningbo Ligong Online | Xilinmen Furniture vs. Guangdong Advertising Co | Xilinmen Furniture vs. Bengang Steel Plates |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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