Correlation Between Muyuan Foodstuff and Xiwang Foodstuffs
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By analyzing existing cross correlation between Muyuan Foodstuff Co and Xiwang Foodstuffs Co, you can compare the effects of market volatilities on Muyuan Foodstuff and Xiwang Foodstuffs 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 Muyuan Foodstuff with a short position of Xiwang Foodstuffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muyuan Foodstuff and Xiwang Foodstuffs.
Diversification Opportunities for Muyuan Foodstuff and Xiwang Foodstuffs
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Muyuan and Xiwang is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Muyuan Foodstuff Co and Xiwang Foodstuffs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Foodstuffs and Muyuan Foodstuff 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 Muyuan Foodstuff Co are associated (or correlated) with Xiwang Foodstuffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Foodstuffs has no effect on the direction of Muyuan Foodstuff i.e., Muyuan Foodstuff and Xiwang Foodstuffs go up and down completely randomly.
Pair Corralation between Muyuan Foodstuff and Xiwang Foodstuffs
Assuming the 90 days trading horizon Muyuan Foodstuff Co is expected to generate 0.5 times more return on investment than Xiwang Foodstuffs. However, Muyuan Foodstuff Co is 2.01 times less risky than Xiwang Foodstuffs. It trades about -0.1 of its potential returns per unit of risk. Xiwang Foodstuffs Co is currently generating about -0.16 per unit of risk. If you would invest 3,824 in Muyuan Foodstuff Co on October 23, 2024 and sell it today you would lose (101.00) from holding Muyuan Foodstuff Co or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muyuan Foodstuff Co vs. Xiwang Foodstuffs Co
Performance |
| Timeline |
| Muyuan Foodstuff |
| Xiwang Foodstuffs |
Muyuan Foodstuff and Xiwang Foodstuffs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muyuan Foodstuff and Xiwang Foodstuffs
The main advantage of trading using opposite Muyuan Foodstuff and Xiwang Foodstuffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muyuan Foodstuff position performs unexpectedly, Xiwang Foodstuffs 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 Xiwang Foodstuffs will offset losses from the drop in Xiwang Foodstuffs' long position.| Muyuan Foodstuff vs. Zhengping RoadBridge Constr | Muyuan Foodstuff vs. Shandong Hi Speed RoadBridge | Muyuan Foodstuff vs. Bangyan Technology Co | Muyuan Foodstuff vs. Road Environment Technology |
| Xiwang Foodstuffs vs. Allwin Telecommunication Co | Xiwang Foodstuffs vs. Muyuan Foodstuff Co | Xiwang Foodstuffs vs. Beijing Bewinner Communications | Xiwang Foodstuffs vs. TianJin 712 Communication |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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