Correlation Between Xinjiang Beixin and Dalian Thermal
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By analyzing existing cross correlation between Xinjiang Beixin RoadBridge and Dalian Thermal Power, you can compare the effects of market volatilities on Xinjiang Beixin and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Beixin and Dalian Thermal.
Diversification Opportunities for Xinjiang Beixin and Dalian Thermal
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Dalian is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Beixin RoadBridge and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Xinjiang Beixin i.e., Xinjiang Beixin and Dalian Thermal go up and down completely randomly.
Pair Corralation between Xinjiang Beixin and Dalian Thermal
Assuming the 90 days trading horizon Xinjiang Beixin RoadBridge is expected to under-perform the Dalian Thermal. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Beixin RoadBridge is 1.66 times less risky than Dalian Thermal. The stock trades about -0.04 of its potential returns per unit of risk. The Dalian Thermal Power is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 464.00 in Dalian Thermal Power on August 29, 2024 and sell it today you would earn a total of 324.00 from holding Dalian Thermal Power or generate 69.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Beixin RoadBridge vs. Dalian Thermal Power
Performance |
| Timeline |
| Xinjiang Beixin Road |
| Dalian Thermal Power |
Xinjiang Beixin and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Beixin and Dalian Thermal
The main advantage of trading using opposite Xinjiang Beixin and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Beixin position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Xinjiang Beixin vs. State Grid InformationCommunication | Xinjiang Beixin vs. Allwin Telecommunication Co | Xinjiang Beixin vs. Juewei Food Co | Xinjiang Beixin vs. Wuhan Yangtze Communication |
| Dalian Thermal vs. BYD Co Ltd | Dalian Thermal vs. China Mobile Limited | Dalian Thermal vs. Agricultural Bank of | Dalian Thermal vs. Industrial and Commercial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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