Correlation Between Xinxiang Chemical and Chongqing Brewery
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By analyzing existing cross correlation between Xinxiang Chemical Fiber and Chongqing Brewery Co, you can compare the effects of market volatilities on Xinxiang Chemical and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinxiang Chemical and Chongqing Brewery.
Diversification Opportunities for Xinxiang Chemical and Chongqing Brewery
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xinxiang and Chongqing is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Xinxiang Chemical Fiber and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Xinxiang Chemical i.e., Xinxiang Chemical and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Xinxiang Chemical and Chongqing Brewery
Assuming the 90 days trading horizon Xinxiang Chemical Fiber is expected to generate 1.3 times more return on investment than Chongqing Brewery. However, Xinxiang Chemical is 1.3 times more volatile than Chongqing Brewery Co. It trades about 0.02 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about -0.06 per unit of risk. If you would invest 336.00 in Xinxiang Chemical Fiber on October 11, 2024 and sell it today you would earn a total of 49.00 from holding Xinxiang Chemical Fiber or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinxiang Chemical Fiber vs. Chongqing Brewery Co
Performance |
| Timeline |
| Xinxiang Chemical Fiber |
| Chongqing Brewery |
Xinxiang Chemical and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinxiang Chemical and Chongqing Brewery
The main advantage of trading using opposite Xinxiang Chemical and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinxiang Chemical position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery'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 |
| Chongqing Brewery vs. Miracll Chemicals Co | Chongqing Brewery vs. China Life Insurance | Chongqing Brewery vs. Xinxiang Chemical Fiber | Chongqing Brewery vs. Shenzhen Noposion Agrochemicals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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