Correlation Between China Securities and Hangzhou Xili
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By analyzing existing cross correlation between China Securities 800 and Hangzhou Xili Intelligent, you can compare the effects of market volatilities on China Securities and Hangzhou Xili 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 Hangzhou Xili. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Hangzhou Xili.
Diversification Opportunities for China Securities and Hangzhou Xili
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Hangzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Hangzhou Xili Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Xili Intelligent 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 Hangzhou Xili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Xili Intelligent has no effect on the direction of China Securities i.e., China Securities and Hangzhou Xili go up and down completely randomly.
Pair Corralation between China Securities and Hangzhou Xili
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Hangzhou Xili. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 1.87 times less risky than Hangzhou Xili. The index trades about -0.1 of its potential returns per unit of risk. The Hangzhou Xili Intelligent is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,188 in Hangzhou Xili Intelligent on September 13, 2024 and sell it today you would lose (3.00) from holding Hangzhou Xili Intelligent or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Securities 800 vs. Hangzhou Xili Intelligent
Performance |
| Timeline |
China Securities and Hangzhou Xili Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Hangzhou Xili Intelligent
Pair trading matchups for Hangzhou Xili
Pair Trading with China Securities and Hangzhou Xili
The main advantage of trading using opposite China Securities and Hangzhou Xili positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Hangzhou Xili 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 Hangzhou Xili will offset losses from the drop in Hangzhou Xili's long position.The idea behind China Securities 800 and Hangzhou Xili Intelligent 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.
| Hangzhou Xili vs. Industrial and Commercial | Hangzhou Xili vs. Agricultural Bank of | Hangzhou Xili vs. China Construction Bank | Hangzhou Xili vs. Bank of China |
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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