Correlation Between Sanquan Food and Xinhua Winshare
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By analyzing existing cross correlation between Sanquan Food Co and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Sanquan Food and Xinhua Winshare 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 Sanquan Food with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanquan Food and Xinhua Winshare.
Diversification Opportunities for Sanquan Food and Xinhua Winshare
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sanquan and Xinhua is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sanquan Food Co and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and Sanquan Food 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 Sanquan Food Co are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Sanquan Food i.e., Sanquan Food and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Sanquan Food and Xinhua Winshare
Assuming the 90 days trading horizon Sanquan Food Co is expected to generate 0.74 times more return on investment than Xinhua Winshare. However, Sanquan Food Co is 1.36 times less risky than Xinhua Winshare. It trades about -0.01 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about -0.08 per unit of risk. If you would invest 1,137 in Sanquan Food Co on November 7, 2024 and sell it today you would lose (3.00) from holding Sanquan Food Co or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanquan Food Co vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Sanquan Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xinhua Winshare Publ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Sanquan Food and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanquan Food and Xinhua Winshare
The main advantage of trading using opposite Sanquan Food and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanquan Food position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.The idea behind Sanquan Food Co and Xinhua Winshare Publishing 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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