Correlation Between HeNan Splendor and Xilinmen Furniture
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By analyzing existing cross correlation between HeNan Splendor Science and Xilinmen Furniture Co, you can compare the effects of market volatilities on HeNan Splendor 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 HeNan Splendor with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeNan Splendor and Xilinmen Furniture.
Diversification Opportunities for HeNan Splendor and Xilinmen Furniture
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HeNan and Xilinmen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HeNan Splendor Science and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture 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 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 HeNan Splendor i.e., HeNan Splendor and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between HeNan Splendor and Xilinmen Furniture
Assuming the 90 days trading horizon HeNan Splendor Science is expected to generate 1.42 times more return on investment than Xilinmen Furniture. However, HeNan Splendor is 1.42 times more volatile than Xilinmen Furniture Co. It trades about 0.05 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about 0.03 per unit of risk. If you would invest 822.00 in HeNan Splendor Science on September 4, 2024 and sell it today you would earn a total of 240.00 from holding HeNan Splendor Science or generate 29.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeNan Splendor Science vs. Xilinmen Furniture Co
Performance |
| Timeline |
| HeNan Splendor Science |
| Xilinmen Furniture |
HeNan Splendor and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeNan Splendor and Xilinmen Furniture
The main advantage of trading using opposite HeNan Splendor and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeNan Splendor 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.| HeNan Splendor vs. Industrial and Commercial | HeNan Splendor vs. China Construction Bank | HeNan Splendor vs. Bank of China | HeNan Splendor vs. Agricultural Bank of |
| Xilinmen Furniture vs. Industrial and Commercial | Xilinmen Furniture vs. Agricultural Bank of | Xilinmen Furniture vs. China Construction Bank | Xilinmen Furniture vs. Bank of China |
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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