Correlation Between Shanghai Metersbonwe and Xilinmen Furniture
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By analyzing existing cross correlation between Shanghai Metersbonwe FashionAccessories and Xilinmen Furniture Co, you can compare the effects of market volatilities on Shanghai Metersbonwe and Xilinmen Furniture 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 Shanghai Metersbonwe with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Metersbonwe and Xilinmen Furniture.
Diversification Opportunities for Shanghai Metersbonwe and Xilinmen Furniture
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Xilinmen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Metersbonwe FashionAc and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture and Shanghai Metersbonwe 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 Shanghai Metersbonwe FashionAccessories are associated (or correlated) with Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Shanghai Metersbonwe i.e., Shanghai Metersbonwe and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Shanghai Metersbonwe and Xilinmen Furniture
Assuming the 90 days trading horizon Shanghai Metersbonwe FashionAccessories is expected to generate 2.56 times more return on investment than Xilinmen Furniture. However, Shanghai Metersbonwe is 2.56 times more volatile than Xilinmen Furniture Co. It trades about 0.27 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.08 per unit of risk. If you would invest 195.00 in Shanghai Metersbonwe FashionAccessories on September 13, 2024 and sell it today you would earn a total of 69.00 from holding Shanghai Metersbonwe FashionAccessories or generate 35.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Metersbonwe FashionAc vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Shanghai Metersbonwe |
| Xilinmen Furniture |
Shanghai Metersbonwe and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Metersbonwe and Xilinmen Furniture
The main advantage of trading using opposite Shanghai Metersbonwe and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Metersbonwe position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture's long position.| Shanghai Metersbonwe vs. Industrial and Commercial | Shanghai Metersbonwe vs. Agricultural Bank of | Shanghai Metersbonwe vs. China Construction Bank | Shanghai Metersbonwe vs. Bank of China |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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