Correlation Between Xinjiang Beixin and Shantui Construction
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By analyzing existing cross correlation between Xinjiang Beixin RoadBridge and Shantui Construction Machinery, you can compare the effects of market volatilities on Xinjiang Beixin and Shantui Construction 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 Xinjiang Beixin with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Beixin and Shantui Construction.
Diversification Opportunities for Xinjiang Beixin and Shantui Construction
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xinjiang and Shantui is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Beixin RoadBridge and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Xinjiang Beixin 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 Xinjiang Beixin RoadBridge are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Xinjiang Beixin i.e., Xinjiang Beixin and Shantui Construction go up and down completely randomly.
Pair Corralation between Xinjiang Beixin and Shantui Construction
Assuming the 90 days trading horizon Xinjiang Beixin RoadBridge is expected to under-perform the Shantui Construction. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Beixin RoadBridge is 1.3 times less risky than Shantui Construction. The stock trades about -0.11 of its potential returns per unit of risk. The Shantui Construction Machinery is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 955.00 in Shantui Construction Machinery on November 3, 2024 and sell it today you would earn a total of 48.00 from holding Shantui Construction Machinery or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Beixin RoadBridge vs. Shantui Construction Machinery
Performance |
| Timeline |
| Xinjiang Beixin Road |
| Shantui Construction |
Xinjiang Beixin and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Beixin and Shantui Construction
The main advantage of trading using opposite Xinjiang Beixin and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Beixin position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Xinjiang Beixin vs. PetroChina Co Ltd | Xinjiang Beixin vs. China Mobile Limited | Xinjiang Beixin vs. CNOOC Limited | Xinjiang Beixin vs. Ping An Insurance |
| Shantui Construction vs. Montage Technology Co | Shantui Construction vs. FSPG Hi Tech Co | Shantui Construction vs. Everjoy Health Group | Shantui Construction vs. Anhui Huaren Health |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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