Correlation Between Kuang Chi and Shaanxi Beiyuan
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By analyzing existing cross correlation between Kuang Chi Technologies and Shaanxi Beiyuan Chemical, you can compare the effects of market volatilities on Kuang Chi and Shaanxi Beiyuan 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 Kuang Chi with a short position of Shaanxi Beiyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuang Chi and Shaanxi Beiyuan.
Diversification Opportunities for Kuang Chi and Shaanxi Beiyuan
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kuang and Shaanxi is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kuang Chi Technologies and Shaanxi Beiyuan Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Beiyuan Chemical and Kuang Chi 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 Kuang Chi Technologies are associated (or correlated) with Shaanxi Beiyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Beiyuan Chemical has no effect on the direction of Kuang Chi i.e., Kuang Chi and Shaanxi Beiyuan go up and down completely randomly.
Pair Corralation between Kuang Chi and Shaanxi Beiyuan
Assuming the 90 days trading horizon Kuang Chi Technologies is expected to generate 2.45 times more return on investment than Shaanxi Beiyuan. However, Kuang Chi is 2.45 times more volatile than Shaanxi Beiyuan Chemical. It trades about 0.2 of its potential returns per unit of risk. Shaanxi Beiyuan Chemical is currently generating about 0.07 per unit of risk. If you would invest 1,740 in Kuang Chi Technologies on September 5, 2024 and sell it today you would earn a total of 2,298 from holding Kuang Chi Technologies or generate 132.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.17% |
| Values | Daily Returns |
Kuang Chi Technologies vs. Shaanxi Beiyuan Chemical
Performance |
| Timeline |
| Kuang Chi Technologies |
| Shaanxi Beiyuan Chemical |
Kuang Chi and Shaanxi Beiyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuang Chi and Shaanxi Beiyuan
The main advantage of trading using opposite Kuang Chi and Shaanxi Beiyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuang Chi position performs unexpectedly, Shaanxi Beiyuan 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 Shaanxi Beiyuan will offset losses from the drop in Shaanxi Beiyuan's long position.| Kuang Chi vs. Cultural Investment Holdings | Kuang Chi vs. Gome Telecom Equipment | Kuang Chi vs. Bus Online Co | Kuang Chi vs. Holitech Technology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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