Correlation Between Xizi Clean and Chengdu Kanghua
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By analyzing existing cross correlation between Xizi Clean Energy and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Xizi Clean and Chengdu Kanghua 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 Xizi Clean with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xizi Clean and Chengdu Kanghua.
Diversification Opportunities for Xizi Clean and Chengdu Kanghua
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xizi and Chengdu is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Xizi Clean Energy and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and Xizi Clean 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 Xizi Clean Energy are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Xizi Clean i.e., Xizi Clean and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Xizi Clean and Chengdu Kanghua
Assuming the 90 days trading horizon Xizi Clean Energy is expected to generate 0.81 times more return on investment than Chengdu Kanghua. However, Xizi Clean Energy is 1.24 times less risky than Chengdu Kanghua. It trades about -0.12 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.21 per unit of risk. If you would invest 1,260 in Xizi Clean Energy on September 12, 2024 and sell it today you would lose (68.00) from holding Xizi Clean Energy or give up 5.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xizi Clean Energy vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Xizi Clean Energy |
| Chengdu Kanghua Biol |
Xizi Clean and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xizi Clean and Chengdu Kanghua
The main advantage of trading using opposite Xizi Clean and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xizi Clean position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Xizi Clean vs. Agricultural Bank of | Xizi Clean vs. Industrial and Commercial | Xizi Clean vs. Bank of China | Xizi Clean vs. PetroChina Co Ltd |
| Chengdu Kanghua vs. Heilongjiang Publishing Media | Chengdu Kanghua vs. China Publishing Media | Chengdu Kanghua vs. Qtone Education Group | Chengdu Kanghua vs. XinJiang GuoTong Pipeline |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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