Correlation Between HeNan Splendor and Xiandai Investment
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By analyzing existing cross correlation between HeNan Splendor Science and Xiandai Investment Co, you can compare the effects of market volatilities on HeNan Splendor and Xiandai Investment 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 HeNan Splendor with a short position of Xiandai Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeNan Splendor and Xiandai Investment.
Diversification Opportunities for HeNan Splendor and Xiandai Investment
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HeNan and Xiandai is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding HeNan Splendor Science and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment and HeNan Splendor 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 HeNan Splendor Science are associated (or correlated) with Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of HeNan Splendor i.e., HeNan Splendor and Xiandai Investment go up and down completely randomly.
Pair Corralation between HeNan Splendor and Xiandai Investment
Assuming the 90 days trading horizon HeNan Splendor Science is expected to generate 2.01 times more return on investment than Xiandai Investment. However, HeNan Splendor is 2.01 times more volatile than Xiandai Investment Co. It trades about 0.24 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about -0.04 per unit of risk. If you would invest 1,048 in HeNan Splendor Science on November 28, 2024 and sell it today you would earn a total of 81.00 from holding HeNan Splendor Science or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeNan Splendor Science vs. Xiandai Investment Co
Performance |
| Timeline |
| HeNan Splendor Science |
| Xiandai Investment |
HeNan Splendor and Xiandai Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeNan Splendor and Xiandai Investment
The main advantage of trading using opposite HeNan Splendor and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeNan Splendor position performs unexpectedly, Xiandai Investment 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 Xiandai Investment will offset losses from the drop in Xiandai Investment's long position.| HeNan Splendor vs. Yankershop Food Co | HeNan Splendor vs. Hygon Information Technology | HeNan Splendor vs. Suzhou Douson Drilling | HeNan Splendor vs. Gan Yuan Foods |
| Xiandai Investment vs. Yinbang Clad Material | Xiandai Investment vs. Wankai New Materials | Xiandai Investment vs. Hua Hong Semiconductor | Xiandai Investment vs. Suzhou Xingye Material |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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