Correlation Between Xinjiang Zhongtai and Yangmei Chemical
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By analyzing existing cross correlation between Xinjiang Zhongtai Chemical and Yangmei Chemical Co, you can compare the effects of market volatilities on Xinjiang Zhongtai and Yangmei Chemical 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 Xinjiang Zhongtai with a short position of Yangmei Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Zhongtai and Yangmei Chemical.
Diversification Opportunities for Xinjiang Zhongtai and Yangmei Chemical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xinjiang and Yangmei is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Zhongtai Chemical and Yangmei Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangmei Chemical and Xinjiang Zhongtai 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 Xinjiang Zhongtai Chemical are associated (or correlated) with Yangmei Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangmei Chemical has no effect on the direction of Xinjiang Zhongtai i.e., Xinjiang Zhongtai and Yangmei Chemical go up and down completely randomly.
Pair Corralation between Xinjiang Zhongtai and Yangmei Chemical
Assuming the 90 days trading horizon Xinjiang Zhongtai is expected to generate 2.2 times less return on investment than Yangmei Chemical. But when comparing it to its historical volatility, Xinjiang Zhongtai Chemical is 1.97 times less risky than Yangmei Chemical. It trades about 0.26 of its potential returns per unit of risk. Yangmei Chemical Co is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 152.00 in Yangmei Chemical Co on September 12, 2024 and sell it today you would earn a total of 136.00 from holding Yangmei Chemical Co or generate 89.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Zhongtai Chemical vs. Yangmei Chemical Co
Performance |
| Timeline |
| Xinjiang Zhongtai |
| Yangmei Chemical |
Xinjiang Zhongtai and Yangmei Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Zhongtai and Yangmei Chemical
The main advantage of trading using opposite Xinjiang Zhongtai and Yangmei Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Zhongtai position performs unexpectedly, Yangmei Chemical 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 Yangmei Chemical will offset losses from the drop in Yangmei Chemical's long position.| Xinjiang Zhongtai vs. Sunny Loan Top | Xinjiang Zhongtai vs. Ye Chiu Metal | Xinjiang Zhongtai vs. Xinjiang Baodi Mining | Xinjiang Zhongtai vs. Zhejiang Kingland Pipeline |
| Yangmei Chemical vs. Tianjin Pengling Rubber | Yangmei Chemical vs. King Strong New Material | Yangmei Chemical vs. Panda Financial Holding | Yangmei Chemical vs. Bank of Suzhou |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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