Correlation Between Xiangtan Electrochemical and Liaoning Dingjide
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By analyzing existing cross correlation between Xiangtan Electrochemical Scientific and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Xiangtan Electrochemical and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangtan Electrochemical and Liaoning Dingjide.
Diversification Opportunities for Xiangtan Electrochemical and Liaoning Dingjide
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xiangtan and Liaoning is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Xiangtan Electrochemical Scien and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Xiangtan Electrochemical i.e., Xiangtan Electrochemical and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Xiangtan Electrochemical and Liaoning Dingjide
Assuming the 90 days trading horizon Xiangtan Electrochemical Scientific is expected to generate 0.96 times more return on investment than Liaoning Dingjide. However, Xiangtan Electrochemical Scientific is 1.04 times less risky than Liaoning Dingjide. It trades about -0.02 of its potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about -0.04 per unit of risk. If you would invest 1,642 in Xiangtan Electrochemical Scientific on October 29, 2024 and sell it today you would lose (619.00) from holding Xiangtan Electrochemical Scientific or give up 37.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangtan Electrochemical Scien vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Xiangtan Electrochemical |
| Liaoning Dingjide |
Xiangtan Electrochemical and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangtan Electrochemical and Liaoning Dingjide
The main advantage of trading using opposite Xiangtan Electrochemical and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangtan Electrochemical position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| Xiangtan Electrochemical vs. Vats Liquor Chain | Xiangtan Electrochemical vs. Meinian Onehealth Healthcare | Xiangtan Electrochemical vs. Lotus Health Group | Xiangtan Electrochemical vs. Youngy Health Co |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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