Correlation Between Xilong Chemical and Sichuan Fulin
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By analyzing existing cross correlation between Xilong Chemical Co and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Xilong Chemical and Sichuan Fulin 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 Xilong Chemical with a short position of Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Sichuan Fulin.
Diversification Opportunities for Xilong Chemical and Sichuan Fulin
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xilong and Sichuan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp and Xilong Chemical 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 Xilong Chemical Co are associated (or correlated) with Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Xilong Chemical i.e., Xilong Chemical and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Xilong Chemical and Sichuan Fulin
Assuming the 90 days trading horizon Xilong Chemical Co is expected to generate 0.86 times more return on investment than Sichuan Fulin. However, Xilong Chemical Co is 1.17 times less risky than Sichuan Fulin. It trades about 0.09 of its potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about -0.01 per unit of risk. If you would invest 765.00 in Xilong Chemical Co on October 28, 2024 and sell it today you would earn a total of 28.00 from holding Xilong Chemical Co or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilong Chemical Co vs. Sichuan Fulin Transportation
Performance |
| Timeline |
| Xilong Chemical |
| Sichuan Fulin Transp |
Xilong Chemical and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilong Chemical and Sichuan Fulin
The main advantage of trading using opposite Xilong Chemical and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong Chemical position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin's long position.| Xilong Chemical vs. Chengtun Mining Group | Xilong Chemical vs. Ningbo Fujia Industrial | Xilong Chemical vs. Huizhou Speed Wireless | Xilong Chemical vs. Citic Guoan Wine |
| Sichuan Fulin vs. Aluminum Corp of | Sichuan Fulin vs. Beijing Kingsoft Office | Sichuan Fulin vs. Shandong Hongchuang Aluminum | Sichuan Fulin vs. Nanjing Putian Telecommunications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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