Correlation Between Xinxiang Chemical and Guangzhou Ruoyuchen
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By analyzing existing cross correlation between Xinxiang Chemical Fiber and Guangzhou Ruoyuchen Information, you can compare the effects of market volatilities on Xinxiang Chemical and Guangzhou Ruoyuchen 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 Xinxiang Chemical with a short position of Guangzhou Ruoyuchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinxiang Chemical and Guangzhou Ruoyuchen.
Diversification Opportunities for Xinxiang Chemical and Guangzhou Ruoyuchen
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinxiang and Guangzhou is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xinxiang Chemical Fiber and Guangzhou Ruoyuchen Informatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Ruoyuchen and Xinxiang Chemical 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 Xinxiang Chemical Fiber are associated (or correlated) with Guangzhou Ruoyuchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Ruoyuchen has no effect on the direction of Xinxiang Chemical i.e., Xinxiang Chemical and Guangzhou Ruoyuchen go up and down completely randomly.
Pair Corralation between Xinxiang Chemical and Guangzhou Ruoyuchen
Assuming the 90 days trading horizon Xinxiang Chemical Fiber is expected to under-perform the Guangzhou Ruoyuchen. But the stock apears to be less risky and, when comparing its historical volatility, Xinxiang Chemical Fiber is 1.53 times less risky than Guangzhou Ruoyuchen. The stock trades about -0.23 of its potential returns per unit of risk. The Guangzhou Ruoyuchen Information is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,254 in Guangzhou Ruoyuchen Information on October 11, 2024 and sell it today you would earn a total of 528.00 from holding Guangzhou Ruoyuchen Information or generate 23.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinxiang Chemical Fiber vs. Guangzhou Ruoyuchen Informatio
Performance |
| Timeline |
| Xinxiang Chemical Fiber |
| Guangzhou Ruoyuchen |
Xinxiang Chemical and Guangzhou Ruoyuchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinxiang Chemical and Guangzhou Ruoyuchen
The main advantage of trading using opposite Xinxiang Chemical and Guangzhou Ruoyuchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinxiang Chemical position performs unexpectedly, Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen will offset losses from the drop in Guangzhou Ruoyuchen's long position.| Xinxiang Chemical vs. Threes Company Media | Xinxiang Chemical vs. Hengdian Entertainment Co | Xinxiang Chemical vs. China Publishing Media | Xinxiang Chemical vs. Yingde Greatchem Chemicals |
| Guangzhou Ruoyuchen vs. Anhui Gujing Distillery | Guangzhou Ruoyuchen vs. Hangzhou Gaoxin Rubber | Guangzhou Ruoyuchen vs. Sichuan Jinshi Technology | Guangzhou Ruoyuchen vs. Cansino Biologics |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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