Correlation Between Xilong Chemical and Muyuan Foodstuff
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By analyzing existing cross correlation between Xilong Chemical Co and Muyuan Foodstuff Co, you can compare the effects of market volatilities on Xilong Chemical and Muyuan Foodstuff 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 Muyuan Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Muyuan Foodstuff.
Diversification Opportunities for Xilong Chemical and Muyuan Foodstuff
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xilong and Muyuan is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Muyuan Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muyuan Foodstuff 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 Muyuan Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muyuan Foodstuff has no effect on the direction of Xilong Chemical i.e., Xilong Chemical and Muyuan Foodstuff go up and down completely randomly.
Pair Corralation between Xilong Chemical and Muyuan Foodstuff
Assuming the 90 days trading horizon Xilong Chemical Co is expected to generate 1.9 times more return on investment than Muyuan Foodstuff. However, Xilong Chemical is 1.9 times more volatile than Muyuan Foodstuff Co. It trades about 0.03 of its potential returns per unit of risk. Muyuan Foodstuff Co is currently generating about -0.17 per unit of risk. If you would invest 788.00 in Xilong Chemical Co on October 22, 2024 and sell it today you would earn a total of 8.00 from holding Xilong Chemical Co or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilong Chemical Co vs. Muyuan Foodstuff Co
Performance |
| Timeline |
| Xilong Chemical |
| Muyuan Foodstuff |
Xilong Chemical and Muyuan Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilong Chemical and Muyuan Foodstuff
The main advantage of trading using opposite Xilong Chemical and Muyuan Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong Chemical position performs unexpectedly, Muyuan Foodstuff 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 Muyuan Foodstuff will offset losses from the drop in Muyuan Foodstuff's long position.| Xilong Chemical vs. Dymatic Chemicals | Xilong Chemical vs. Beijing Mainstreets Investment | Xilong Chemical vs. Vanfund Urban Investment | Xilong Chemical vs. Juneyao Airlines |
| Muyuan Foodstuff vs. Guizhou Chanhen Chemical | Muyuan Foodstuff vs. Xilong Chemical Co | Muyuan Foodstuff vs. Maoming Petro Chemical Shihua | Muyuan Foodstuff vs. Yangmei Chemical Co |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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