Correlation Between SUNSEA Telecommunicatio and Xinjiang Baodi
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By analyzing existing cross correlation between SUNSEA Telecommunications Co and Xinjiang Baodi Mining, you can compare the effects of market volatilities on SUNSEA Telecommunicatio and Xinjiang Baodi 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 SUNSEA Telecommunicatio with a short position of Xinjiang Baodi. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNSEA Telecommunicatio and Xinjiang Baodi.
Diversification Opportunities for SUNSEA Telecommunicatio and Xinjiang Baodi
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SUNSEA and Xinjiang is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SUNSEA Telecommunications Co and Xinjiang Baodi Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Baodi Mining and SUNSEA Telecommunicatio 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 SUNSEA Telecommunications Co are associated (or correlated) with Xinjiang Baodi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Baodi Mining has no effect on the direction of SUNSEA Telecommunicatio i.e., SUNSEA Telecommunicatio and Xinjiang Baodi go up and down completely randomly.
Pair Corralation between SUNSEA Telecommunicatio and Xinjiang Baodi
Assuming the 90 days trading horizon SUNSEA Telecommunications Co is expected to generate 1.44 times more return on investment than Xinjiang Baodi. However, SUNSEA Telecommunicatio is 1.44 times more volatile than Xinjiang Baodi Mining. It trades about 0.16 of its potential returns per unit of risk. Xinjiang Baodi Mining is currently generating about 0.13 per unit of risk. If you would invest 582.00 in SUNSEA Telecommunications Co on August 25, 2024 and sell it today you would earn a total of 233.00 from holding SUNSEA Telecommunications Co or generate 40.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUNSEA Telecommunications Co vs. Xinjiang Baodi Mining
Performance |
| Timeline |
| SUNSEA Telecommunicatio |
| Xinjiang Baodi Mining |
SUNSEA Telecommunicatio and Xinjiang Baodi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUNSEA Telecommunicatio and Xinjiang Baodi
The main advantage of trading using opposite SUNSEA Telecommunicatio and Xinjiang Baodi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNSEA Telecommunicatio position performs unexpectedly, Xinjiang Baodi 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 Xinjiang Baodi will offset losses from the drop in Xinjiang Baodi's long position.The idea behind SUNSEA Telecommunications Co and Xinjiang Baodi Mining 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.
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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