Correlation Between Sichuan Fulin and Xinjiang Communications
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Xinjiang Communications Construction, you can compare the effects of market volatilities on Sichuan Fulin and Xinjiang Communications 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 Sichuan Fulin with a short position of Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Xinjiang Communications.
Diversification Opportunities for Sichuan Fulin and Xinjiang Communications
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Xinjiang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Xinjiang Communications
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to generate 1.43 times more return on investment than Xinjiang Communications. However, Sichuan Fulin is 1.43 times more volatile than Xinjiang Communications Construction. It trades about 0.06 of its potential returns per unit of risk. Xinjiang Communications Construction is currently generating about -0.13 per unit of risk. If you would invest 707.00 in Sichuan Fulin Transportation on September 29, 2024 and sell it today you would earn a total of 22.00 from holding Sichuan Fulin Transportation or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Xinjiang Communications Constr
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Xinjiang Communications |
Sichuan Fulin and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Xinjiang Communications
The main advantage of trading using opposite Sichuan Fulin and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Xinjiang Communications 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 Communications will offset losses from the drop in Xinjiang Communications' long position.| Sichuan Fulin vs. Shandong Sinoglory Health | Sichuan Fulin vs. AVIC Fund Management | Sichuan Fulin vs. Zhejiang Kingland Pipeline | Sichuan Fulin vs. PKU HealthCare Corp |
| Xinjiang Communications vs. Agricultural Bank of | Xinjiang Communications vs. Industrial and Commercial | Xinjiang Communications vs. Bank of China | Xinjiang Communications vs. China Construction Bank |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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