Correlation Between Kuang Chi and Xilinmen Furniture
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By analyzing existing cross correlation between Kuang Chi Technologies and Xilinmen Furniture Co, you can compare the effects of market volatilities on Kuang Chi and Xilinmen Furniture 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 Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuang Chi and Xilinmen Furniture.
Diversification Opportunities for Kuang Chi and Xilinmen Furniture
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kuang and Xilinmen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kuang Chi Technologies and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture 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 Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Kuang Chi i.e., Kuang Chi and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Kuang Chi and Xilinmen Furniture
Assuming the 90 days trading horizon Kuang Chi Technologies is expected to generate 1.92 times more return on investment than Xilinmen Furniture. However, Kuang Chi is 1.92 times more volatile than Xilinmen Furniture Co. It trades about 0.01 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.06 per unit of risk. If you would invest 4,069 in Kuang Chi Technologies on September 3, 2024 and sell it today you would lose (56.00) from holding Kuang Chi Technologies or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuang Chi Technologies vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Kuang Chi Technologies |
| Xilinmen Furniture |
Kuang Chi and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuang Chi and Xilinmen Furniture
The main advantage of trading using opposite Kuang Chi and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuang Chi position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture's long position.| Kuang Chi vs. PetroChina Co Ltd | Kuang Chi vs. China Mobile Limited | Kuang Chi vs. Industrial and Commercial | Kuang Chi vs. China Life Insurance |
| Xilinmen Furniture vs. Tongxing Environmental Protection | Xilinmen Furniture vs. Ningbo Ligong Online | Xilinmen Furniture vs. Guangdong Advertising Co | Xilinmen Furniture vs. Bengang Steel Plates |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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