Correlation Between Xinxiang Chemical and Shandong Homey
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By analyzing existing cross correlation between Xinxiang Chemical Fiber and Shandong Homey Aquatic, you can compare the effects of market volatilities on Xinxiang Chemical and Shandong Homey 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 Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinxiang Chemical and Shandong Homey.
Diversification Opportunities for Xinxiang Chemical and Shandong Homey
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinxiang and Shandong is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Xinxiang Chemical Fiber and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Xinxiang Chemical i.e., Xinxiang Chemical and Shandong Homey go up and down completely randomly.
Pair Corralation between Xinxiang Chemical and Shandong Homey
Assuming the 90 days trading horizon Xinxiang Chemical Fiber is expected to generate 1.16 times more return on investment than Shandong Homey. However, Xinxiang Chemical is 1.16 times more volatile than Shandong Homey Aquatic. It trades about 0.04 of its potential returns per unit of risk. Shandong Homey Aquatic is currently generating about 0.02 per unit of risk. If you would invest 332.00 in Xinxiang Chemical Fiber on September 16, 2024 and sell it today you would earn a total of 122.00 from holding Xinxiang Chemical Fiber or generate 36.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinxiang Chemical Fiber vs. Shandong Homey Aquatic
Performance |
| Timeline |
| Xinxiang Chemical Fiber |
| Shandong Homey Aquatic |
Xinxiang Chemical and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinxiang Chemical and Shandong Homey
The main advantage of trading using opposite Xinxiang Chemical and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinxiang Chemical position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey's long position.| Xinxiang Chemical vs. Shandong Homey Aquatic | Xinxiang Chemical vs. Great Sun Foods Co | Xinxiang Chemical vs. Nanjing OLO Home | Xinxiang Chemical vs. Zoy Home Furnishing |
| Shandong Homey vs. Nanjing Putian Telecommunications | Shandong Homey vs. Tianjin Realty Development | Shandong Homey vs. Kangyue Technology Co | Shandong Homey vs. Shenzhen Hifuture Electric |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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