Correlation Between Advanced Technology and Xinjiang Tianrun
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By analyzing existing cross correlation between Advanced Technology Materials and Xinjiang Tianrun Dairy, you can compare the effects of market volatilities on Advanced Technology and Xinjiang Tianrun 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 Advanced Technology with a short position of Xinjiang Tianrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Technology and Xinjiang Tianrun.
Diversification Opportunities for Advanced Technology and Xinjiang Tianrun
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and Xinjiang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Technology Materials and Xinjiang Tianrun Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianrun Dairy and Advanced Technology 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 Advanced Technology Materials are associated (or correlated) with Xinjiang Tianrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianrun Dairy has no effect on the direction of Advanced Technology i.e., Advanced Technology and Xinjiang Tianrun go up and down completely randomly.
Pair Corralation between Advanced Technology and Xinjiang Tianrun
Assuming the 90 days trading horizon Advanced Technology Materials is expected to generate 0.82 times more return on investment than Xinjiang Tianrun. However, Advanced Technology Materials is 1.22 times less risky than Xinjiang Tianrun. It trades about 0.15 of its potential returns per unit of risk. Xinjiang Tianrun Dairy is currently generating about -0.18 per unit of risk. If you would invest 1,074 in Advanced Technology Materials on November 3, 2024 and sell it today you would earn a total of 78.00 from holding Advanced Technology Materials or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Technology Materials vs. Xinjiang Tianrun Dairy
Performance |
| Timeline |
| Advanced Technology |
| Xinjiang Tianrun Dairy |
Advanced Technology and Xinjiang Tianrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Technology and Xinjiang Tianrun
The main advantage of trading using opposite Advanced Technology and Xinjiang Tianrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Technology position performs unexpectedly, Xinjiang Tianrun 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 Xinjiang Tianrun will offset losses from the drop in Xinjiang Tianrun's long position.The idea behind Advanced Technology Materials and Xinjiang Tianrun Dairy 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.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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