Correlation Between Xilong Chemical and Spring Airlines
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By analyzing existing cross correlation between Xilong Chemical Co and Spring Airlines Co, you can compare the effects of market volatilities on Xilong Chemical and Spring Airlines 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 Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Spring Airlines.
Diversification Opportunities for Xilong Chemical and Spring Airlines
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xilong and Spring is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines 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 Spring Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Airlines has no effect on the direction of Xilong Chemical i.e., Xilong Chemical and Spring Airlines go up and down completely randomly.
Pair Corralation between Xilong Chemical and Spring Airlines
Assuming the 90 days trading horizon Xilong Chemical Co is expected to generate 1.25 times more return on investment than Spring Airlines. However, Xilong Chemical is 1.25 times more volatile than Spring Airlines Co. It trades about 0.09 of its potential returns per unit of risk. Spring Airlines Co is currently generating about -0.2 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilong Chemical Co vs. Spring Airlines Co
Performance |
| Timeline |
| Xilong Chemical |
| Spring Airlines |
Xilong Chemical and Spring Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilong Chemical and Spring Airlines
The main advantage of trading using opposite Xilong Chemical and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong Chemical position performs unexpectedly, Spring Airlines 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 Spring Airlines will offset losses from the drop in Spring Airlines' long position.| Xilong Chemical vs. Tongxing Environmental Protection | Xilong Chemical vs. Guangzhou Automobile Group | Xilong Chemical vs. CIMC Vehicles Co | Xilong Chemical vs. Haima Automobile Group |
| Spring Airlines vs. GRIPM Advanced Materials | Spring Airlines vs. Qingdao Foods Co | Spring Airlines vs. Suzhou Xingye Material | Spring Airlines vs. Eastroc Beverage Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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