Correlation Between Xilong Chemical and Guizhou Chanhen
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By analyzing existing cross correlation between Xilong Chemical Co and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Xilong Chemical and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Guizhou Chanhen.
Diversification Opportunities for Xilong Chemical and Guizhou Chanhen
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xilong and Guizhou is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Xilong Chemical i.e., Xilong Chemical and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Xilong Chemical and Guizhou Chanhen
Assuming the 90 days trading horizon Xilong Chemical Co is expected to generate 1.47 times more return on investment than Guizhou Chanhen. However, Xilong Chemical is 1.47 times more volatile than Guizhou Chanhen Chemical. It trades about 0.02 of its potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about -0.01 per unit of risk. If you would invest 714.00 in Xilong Chemical Co on October 25, 2024 and sell it today you would earn a total of 66.00 from holding Xilong Chemical Co or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilong Chemical Co vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Xilong Chemical |
| Guizhou Chanhen Chemical |
Xilong Chemical and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilong Chemical and Guizhou Chanhen
The main advantage of trading using opposite Xilong Chemical and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong Chemical position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Xilong Chemical vs. Zijin Mining Group | Xilong Chemical vs. Wanhua Chemical Group | Xilong Chemical vs. Baoshan Iron Steel | Xilong Chemical vs. Rongsheng Petrochemical Co |
| Guizhou Chanhen vs. Zijin Mining Group | Guizhou Chanhen vs. Wanhua Chemical Group | Guizhou Chanhen vs. Baoshan Iron Steel | Guizhou Chanhen vs. Rongsheng Petrochemical 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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