Correlation Between Xinjiang Beixin and Juneyao Airlines
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By analyzing existing cross correlation between Xinjiang Beixin RoadBridge and Juneyao Airlines, you can compare the effects of market volatilities on Xinjiang Beixin and Juneyao Airlines 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 Juneyao Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Beixin and Juneyao Airlines.
Diversification Opportunities for Xinjiang Beixin and Juneyao Airlines
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Juneyao is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Beixin RoadBridge and Juneyao Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juneyao Airlines 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 Juneyao Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juneyao Airlines has no effect on the direction of Xinjiang Beixin i.e., Xinjiang Beixin and Juneyao Airlines go up and down completely randomly.
Pair Corralation between Xinjiang Beixin and Juneyao Airlines
Assuming the 90 days trading horizon Xinjiang Beixin RoadBridge is expected to under-perform the Juneyao Airlines. In addition to that, Xinjiang Beixin is 1.45 times more volatile than Juneyao Airlines. It trades about -0.13 of its total potential returns per unit of risk. Juneyao Airlines is currently generating about -0.02 per unit of volatility. If you would invest 1,369 in Juneyao Airlines on November 7, 2024 and sell it today you would lose (45.00) from holding Juneyao Airlines or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Beixin RoadBridge vs. Juneyao Airlines
Performance |
| Timeline |
| Xinjiang Beixin Road |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Juneyao Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Xinjiang Beixin and Juneyao Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Beixin and Juneyao Airlines
The main advantage of trading using opposite Xinjiang Beixin and Juneyao Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Beixin position performs unexpectedly, Juneyao Airlines 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 Juneyao Airlines will offset losses from the drop in Juneyao Airlines' long position.The idea behind Xinjiang Beixin RoadBridge and Juneyao Airlines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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