Correlation Between Xilong Chemical and Tongxing Environmental
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By analyzing existing cross correlation between Xilong Chemical Co and Tongxing Environmental Protection, you can compare the effects of market volatilities on Xilong Chemical and Tongxing Environmental 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 Tongxing Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Tongxing Environmental.
Diversification Opportunities for Xilong Chemical and Tongxing Environmental
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xilong and Tongxing is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Tongxing Environmental Protect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongxing Environmental 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 Tongxing Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongxing Environmental has no effect on the direction of Xilong Chemical i.e., Xilong Chemical and Tongxing Environmental go up and down completely randomly.
Pair Corralation between Xilong Chemical and Tongxing Environmental
Assuming the 90 days trading horizon Xilong Chemical Co is expected to generate 0.93 times more return on investment than Tongxing Environmental. However, Xilong Chemical Co is 1.07 times less risky than Tongxing Environmental. It trades about -0.17 of its potential returns per unit of risk. Tongxing Environmental Protection is currently generating about -0.31 per unit of risk. If you would invest 885.00 in Xilong Chemical Co on October 15, 2024 and sell it today you would lose (96.00) from holding Xilong Chemical Co or give up 10.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilong Chemical Co vs. Tongxing Environmental Protect
Performance |
| Timeline |
| Xilong Chemical |
| Tongxing Environmental |
Xilong Chemical and Tongxing Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilong Chemical and Tongxing Environmental
The main advantage of trading using opposite Xilong Chemical and Tongxing Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong Chemical position performs unexpectedly, Tongxing Environmental 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 Tongxing Environmental will offset losses from the drop in Tongxing Environmental's long position.| Xilong Chemical vs. Hainan Haiqi Transportation | Xilong Chemical vs. Bangyan Technology Co | Xilong Chemical vs. Guangzhou KingTeller Technology | Xilong Chemical vs. Sinofibers Technology Co |
| Tongxing Environmental vs. Jiangnan Mould Plastic | Tongxing Environmental vs. Tibet Huayu Mining | Tongxing Environmental vs. Xinjiang Baodi Mining | Tongxing Environmental vs. Hefei Metalforming Mach |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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