Correlation Between Shaanxi Meineng and Wintao Communications
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Wintao Communications Co, you can compare the effects of market volatilities on Shaanxi Meineng and Wintao Communications 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 Shaanxi Meineng with a short position of Wintao Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Wintao Communications.
Diversification Opportunities for Shaanxi Meineng and Wintao Communications
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Wintao is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Wintao Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintao Communications and Shaanxi Meineng 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 Shaanxi Meineng Clean are associated (or correlated) with Wintao Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintao Communications has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Wintao Communications go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Wintao Communications
Assuming the 90 days trading horizon Shaanxi Meineng is expected to generate 2.56 times less return on investment than Wintao Communications. But when comparing it to its historical volatility, Shaanxi Meineng Clean is 1.43 times less risky than Wintao Communications. It trades about 0.12 of its potential returns per unit of risk. Wintao Communications Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,003 in Wintao Communications Co on November 7, 2024 and sell it today you would earn a total of 190.00 from holding Wintao Communications Co or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Wintao Communications Co
Performance |
| Timeline |
| Shaanxi Meineng Clean |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wintao Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shaanxi Meineng and Wintao Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Wintao Communications
The main advantage of trading using opposite Shaanxi Meineng and Wintao Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Wintao Communications 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 Wintao Communications will offset losses from the drop in Wintao Communications' long position.The idea behind Shaanxi Meineng Clean and Wintao Communications Co 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.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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