Correlation Between Xilong Chemical and Allied Machinery
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By analyzing existing cross correlation between Xilong Chemical Co and Allied Machinery Co, you can compare the effects of market volatilities on Xilong Chemical and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Allied Machinery.
Diversification Opportunities for Xilong Chemical and Allied Machinery
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xilong and Allied is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Xilong Chemical i.e., Xilong Chemical and Allied Machinery go up and down completely randomly.
Pair Corralation between Xilong Chemical and Allied Machinery
Assuming the 90 days trading horizon Xilong Chemical Co is expected to generate 1.39 times more return on investment than Allied Machinery. However, Xilong Chemical is 1.39 times more volatile than Allied Machinery Co. It trades about 0.02 of its potential returns per unit of risk. Allied Machinery Co is currently generating about -0.02 per unit of risk. If you would invest 708.00 in Xilong Chemical Co on October 15, 2024 and sell it today you would earn a total of 81.00 from holding Xilong Chemical Co or generate 11.44% 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. Allied Machinery Co
Performance |
| Timeline |
| Xilong Chemical |
| Allied Machinery |
Xilong Chemical and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilong Chemical and Allied Machinery
The main advantage of trading using opposite Xilong Chemical and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong Chemical position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery'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 |
| Allied Machinery vs. Winner Medical Co | Allied Machinery vs. JCHX Mining Management | Allied Machinery vs. Shenyang Blue Silver | Allied Machinery vs. Zhongzhu Medical Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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