Correlation Between Xinxiang Chemical and Mengtian Home
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By analyzing existing cross correlation between Xinxiang Chemical Fiber and Mengtian Home Group, you can compare the effects of market volatilities on Xinxiang Chemical and Mengtian Home 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 Mengtian Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinxiang Chemical and Mengtian Home.
Diversification Opportunities for Xinxiang Chemical and Mengtian Home
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinxiang and Mengtian is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xinxiang Chemical Fiber and Mengtian Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mengtian Home Group 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 Mengtian Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mengtian Home Group has no effect on the direction of Xinxiang Chemical i.e., Xinxiang Chemical and Mengtian Home go up and down completely randomly.
Pair Corralation between Xinxiang Chemical and Mengtian Home
Assuming the 90 days trading horizon Xinxiang Chemical is expected to generate 6.44 times less return on investment than Mengtian Home. But when comparing it to its historical volatility, Xinxiang Chemical Fiber is 1.17 times less risky than Mengtian Home. It trades about 0.0 of its potential returns per unit of risk. Mengtian Home Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,095 in Mengtian Home Group on October 30, 2024 and sell it today you would earn a total of 8.00 from holding Mengtian Home Group or generate 0.73% 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. Mengtian Home Group
Performance |
| Timeline |
| Xinxiang Chemical Fiber |
| Mengtian Home Group |
Xinxiang Chemical and Mengtian Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinxiang Chemical and Mengtian Home
The main advantage of trading using opposite Xinxiang Chemical and Mengtian Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinxiang Chemical position performs unexpectedly, Mengtian Home 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 Mengtian Home will offset losses from the drop in Mengtian Home's long position.| Xinxiang Chemical vs. Jinhui Mining Co | Xinxiang Chemical vs. Ningbo Construction Co | Xinxiang Chemical vs. Uroica Mining Safety | Xinxiang Chemical vs. Gifore Agricultural Machinery |
| Mengtian Home vs. Cloud Live Technology | Mengtian Home vs. Nanjing Putian Telecommunications | Mengtian Home vs. Shenzhen Coship Electronics | Mengtian Home 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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