Correlation Between Lier Chemical and Xiangyang Automobile
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By analyzing existing cross correlation between Lier Chemical Co and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Lier Chemical and Xiangyang Automobile 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 Lier Chemical with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lier Chemical and Xiangyang Automobile.
Diversification Opportunities for Lier Chemical and Xiangyang Automobile
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lier and Xiangyang is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lier Chemical Co and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Lier Chemical 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 Lier Chemical Co are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Lier Chemical i.e., Lier Chemical and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Lier Chemical and Xiangyang Automobile
Assuming the 90 days trading horizon Lier Chemical Co is expected to generate 0.38 times more return on investment than Xiangyang Automobile. However, Lier Chemical Co is 2.65 times less risky than Xiangyang Automobile. It trades about 0.0 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about -0.07 per unit of risk. If you would invest 845.00 in Lier Chemical Co on October 29, 2024 and sell it today you would lose (3.00) from holding Lier Chemical Co or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lier Chemical Co vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Lier Chemical |
| Xiangyang Automobile |
Lier Chemical and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lier Chemical and Xiangyang Automobile
The main advantage of trading using opposite Lier Chemical and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lier Chemical position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.| Lier Chemical vs. Allied Machinery Co | Lier Chemical vs. Gifore Agricultural Machinery | Lier Chemical vs. Anhui Guofeng Plastic | Lier Chemical vs. Guangzhou Tinci Materials |
| Xiangyang Automobile vs. Guangzhou Jinyi Media | Xiangyang Automobile vs. Duzhe Publishing Media | Xiangyang Automobile vs. Shanghai Xinhua Media | Xiangyang Automobile vs. Beijing YanDong MicroElectronic |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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