Correlation Between Xiangtan Electrochemical and Industrial
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By analyzing existing cross correlation between Xiangtan Electrochemical Scientific and Industrial and Commercial, you can compare the effects of market volatilities on Xiangtan Electrochemical and Industrial 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 Xiangtan Electrochemical with a short position of Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangtan Electrochemical and Industrial.
Diversification Opportunities for Xiangtan Electrochemical and Industrial
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xiangtan and Industrial is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xiangtan Electrochemical Scien and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial and Xiangtan Electrochemical 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 Xiangtan Electrochemical Scientific are associated (or correlated) with Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Xiangtan Electrochemical i.e., Xiangtan Electrochemical and Industrial go up and down completely randomly.
Pair Corralation between Xiangtan Electrochemical and Industrial
Assuming the 90 days trading horizon Xiangtan Electrochemical Scientific is expected to under-perform the Industrial. In addition to that, Xiangtan Electrochemical is 2.17 times more volatile than Industrial and Commercial. It trades about -0.02 of its total potential returns per unit of risk. Industrial and Commercial is currently generating about 0.1 per unit of volatility. If you would invest 403.00 in Industrial and Commercial on October 31, 2024 and sell it today you would earn a total of 279.00 from holding Industrial and Commercial or generate 69.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangtan Electrochemical Scien vs. Industrial and Commercial
Performance |
| Timeline |
| Xiangtan Electrochemical |
| Industrial and Commercial |
Xiangtan Electrochemical and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangtan Electrochemical and Industrial
The main advantage of trading using opposite Xiangtan Electrochemical and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangtan Electrochemical position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.The idea behind Xiangtan Electrochemical Scientific and Industrial and Commercial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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