Correlation Between Chengdu Xinzhu and Hainan Haiqi
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By analyzing existing cross correlation between Chengdu Xinzhu RoadBridge and Hainan Haiqi Transportation, you can compare the effects of market volatilities on Chengdu Xinzhu and Hainan Haiqi 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 Hainan Haiqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xinzhu and Hainan Haiqi.
Diversification Opportunities for Chengdu Xinzhu and Hainan Haiqi
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chengdu and Hainan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xinzhu RoadBridge and Hainan Haiqi Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiqi Transpo 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 Hainan Haiqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiqi Transpo has no effect on the direction of Chengdu Xinzhu i.e., Chengdu Xinzhu and Hainan Haiqi go up and down completely randomly.
Pair Corralation between Chengdu Xinzhu and Hainan Haiqi
Assuming the 90 days trading horizon Chengdu Xinzhu RoadBridge is expected to generate 1.5 times more return on investment than Hainan Haiqi. However, Chengdu Xinzhu is 1.5 times more volatile than Hainan Haiqi Transportation. It trades about 0.1 of its potential returns per unit of risk. Hainan Haiqi Transportation is currently generating about -0.16 per unit of risk. If you would invest 507.00 in Chengdu Xinzhu RoadBridge on October 11, 2024 and sell it today you would earn a total of 79.00 from holding Chengdu Xinzhu RoadBridge or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xinzhu RoadBridge vs. Hainan Haiqi Transportation
Performance |
| Timeline |
| Chengdu Xinzhu RoadBridge |
| Hainan Haiqi Transpo |
Chengdu Xinzhu and Hainan Haiqi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xinzhu and Hainan Haiqi
The main advantage of trading using opposite Chengdu Xinzhu and Hainan Haiqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xinzhu position performs unexpectedly, Hainan Haiqi 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 Hainan Haiqi will offset losses from the drop in Hainan Haiqi's long position.| Chengdu Xinzhu vs. Inspur Software Co | Chengdu Xinzhu vs. Thunder Software Technology | Chengdu Xinzhu vs. Shanghai Newtouch Software | Chengdu Xinzhu vs. Bingo Software Co |
| Hainan Haiqi vs. Beijing Kingsoft Office | Hainan Haiqi vs. Guangzhou Restaurants Group | Hainan Haiqi vs. Anhui Transport Consulting | Hainan Haiqi vs. Easyhome New Retail |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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