Correlation Between Chengdu Xinzhu and King Strong
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By analyzing existing cross correlation between Chengdu Xinzhu RoadBridge and King Strong New Material, you can compare the effects of market volatilities on Chengdu Xinzhu and King Strong 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 Chengdu Xinzhu with a short position of King Strong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xinzhu and King Strong.
Diversification Opportunities for Chengdu Xinzhu and King Strong
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and King is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xinzhu RoadBridge and King Strong New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Strong New and Chengdu Xinzhu 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 Chengdu Xinzhu RoadBridge are associated (or correlated) with King Strong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Strong New has no effect on the direction of Chengdu Xinzhu i.e., Chengdu Xinzhu and King Strong go up and down completely randomly.
Pair Corralation between Chengdu Xinzhu and King Strong
Assuming the 90 days trading horizon Chengdu Xinzhu RoadBridge is expected to under-perform the King Strong. But the stock apears to be less risky and, when comparing its historical volatility, Chengdu Xinzhu RoadBridge is 1.7 times less risky than King Strong. The stock trades about -0.03 of its potential returns per unit of risk. The King Strong New Material is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,091 in King Strong New Material on August 29, 2024 and sell it today you would earn a total of 51.00 from holding King Strong New Material or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xinzhu RoadBridge vs. King Strong New Material
Performance |
| Timeline |
| Chengdu Xinzhu RoadBridge |
| King Strong New |
Chengdu Xinzhu and King Strong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xinzhu and King Strong
The main advantage of trading using opposite Chengdu Xinzhu and King Strong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xinzhu position performs unexpectedly, King Strong 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 King Strong will offset losses from the drop in King Strong's long position.| Chengdu Xinzhu vs. PetroChina Co Ltd | Chengdu Xinzhu vs. China State Construction | Chengdu Xinzhu vs. China Mobile Limited | Chengdu Xinzhu vs. Industrial and Commercial |
| King Strong vs. PetroChina Co Ltd | King Strong vs. China State Construction | King Strong vs. China Mobile Limited | King Strong 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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