Correlation Between Cangzhou Mingzhu and Xinke Material
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By analyzing existing cross correlation between Cangzhou Mingzhu Plastic and Xinke Material, you can compare the effects of market volatilities on Cangzhou Mingzhu and Xinke Material 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 Cangzhou Mingzhu with a short position of Xinke Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cangzhou Mingzhu and Xinke Material.
Diversification Opportunities for Cangzhou Mingzhu and Xinke Material
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cangzhou and Xinke is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cangzhou Mingzhu Plastic and Xinke Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinke Material and Cangzhou Mingzhu 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 Cangzhou Mingzhu Plastic are associated (or correlated) with Xinke Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinke Material has no effect on the direction of Cangzhou Mingzhu i.e., Cangzhou Mingzhu and Xinke Material go up and down completely randomly.
Pair Corralation between Cangzhou Mingzhu and Xinke Material
Assuming the 90 days trading horizon Cangzhou Mingzhu Plastic is expected to under-perform the Xinke Material. But the stock apears to be less risky and, when comparing its historical volatility, Cangzhou Mingzhu Plastic is 1.48 times less risky than Xinke Material. The stock trades about -0.02 of its potential returns per unit of risk. The Xinke Material is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 217.00 in Xinke Material on August 29, 2024 and sell it today you would earn a total of 18.00 from holding Xinke Material or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cangzhou Mingzhu Plastic vs. Xinke Material
Performance |
| Timeline |
| Cangzhou Mingzhu Plastic |
| Xinke Material |
Cangzhou Mingzhu and Xinke Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cangzhou Mingzhu and Xinke Material
The main advantage of trading using opposite Cangzhou Mingzhu and Xinke Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cangzhou Mingzhu position performs unexpectedly, Xinke Material 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 Xinke Material will offset losses from the drop in Xinke Material's long position.| Cangzhou Mingzhu vs. Zhejiang Kingland Pipeline | Cangzhou Mingzhu vs. COL Digital Publishing | Cangzhou Mingzhu vs. Suzhou Novoprotein Scientific | Cangzhou Mingzhu vs. Xiangyang Automobile Bearing |
| Xinke Material vs. Wanhua Chemical Group | Xinke Material vs. Shandong Gold Mining | Xinke Material vs. Rongsheng Petrochemical Co | Xinke Material vs. Inner Mongolia BaoTou |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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