Correlation Between Xinjiang Beixin and Jinhui Liquor
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By analyzing existing cross correlation between Xinjiang Beixin RoadBridge and Jinhui Liquor Co, you can compare the effects of market volatilities on Xinjiang Beixin and Jinhui Liquor 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 Jinhui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Beixin and Jinhui Liquor.
Diversification Opportunities for Xinjiang Beixin and Jinhui Liquor
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Jinhui is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Beixin RoadBridge and Jinhui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Liquor 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 Jinhui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Liquor has no effect on the direction of Xinjiang Beixin i.e., Xinjiang Beixin and Jinhui Liquor go up and down completely randomly.
Pair Corralation between Xinjiang Beixin and Jinhui Liquor
Assuming the 90 days trading horizon Xinjiang Beixin RoadBridge is expected to under-perform the Jinhui Liquor. In addition to that, Xinjiang Beixin is 2.04 times more volatile than Jinhui Liquor Co. It trades about -0.05 of its total potential returns per unit of risk. Jinhui Liquor Co is currently generating about 0.19 per unit of volatility. If you would invest 1,818 in Jinhui Liquor Co on November 7, 2024 and sell it today you would earn a total of 65.00 from holding Jinhui Liquor Co or generate 3.58% 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. Jinhui Liquor Co
Performance |
| Timeline |
| Xinjiang Beixin Road |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jinhui Liquor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xinjiang Beixin and Jinhui Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Beixin and Jinhui Liquor
The main advantage of trading using opposite Xinjiang Beixin and Jinhui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Beixin position performs unexpectedly, Jinhui Liquor 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 Jinhui Liquor will offset losses from the drop in Jinhui Liquor's long position.The idea behind Xinjiang Beixin RoadBridge and Jinhui Liquor Co 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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