Correlation Between Xiamen Wanli and Arrow Home
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By analyzing existing cross correlation between Xiamen Wanli Stone and Arrow Home Group, you can compare the effects of market volatilities on Xiamen Wanli and Arrow Home 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 Xiamen Wanli with a short position of Arrow Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Wanli and Arrow Home.
Diversification Opportunities for Xiamen Wanli and Arrow Home
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Arrow is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Wanli Stone and Arrow Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Home Group and Xiamen Wanli 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 Xiamen Wanli Stone are associated (or correlated) with Arrow Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Home Group has no effect on the direction of Xiamen Wanli i.e., Xiamen Wanli and Arrow Home go up and down completely randomly.
Pair Corralation between Xiamen Wanli and Arrow Home
Assuming the 90 days trading horizon Xiamen Wanli Stone is expected to generate 1.09 times more return on investment than Arrow Home. However, Xiamen Wanli is 1.09 times more volatile than Arrow Home Group. It trades about 0.25 of its potential returns per unit of risk. Arrow Home Group is currently generating about 0.07 per unit of risk. If you would invest 2,525 in Xiamen Wanli Stone on August 25, 2024 and sell it today you would earn a total of 1,032 from holding Xiamen Wanli Stone or generate 40.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Wanli Stone vs. Arrow Home Group
Performance |
| Timeline |
| Xiamen Wanli Stone |
| Arrow Home Group |
Xiamen Wanli and Arrow Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Wanli and Arrow Home
The main advantage of trading using opposite Xiamen Wanli and Arrow Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Wanli position performs unexpectedly, Arrow Home 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 Arrow Home will offset losses from the drop in Arrow Home's long position.| Xiamen Wanli vs. Western Superconducting Tech | Xiamen Wanli vs. Dareway Software Co | Xiamen Wanli vs. Hubeiyichang Transportation Group | Xiamen Wanli vs. Linewell Software Co |
| Arrow Home vs. Zhongtong Guomai Communication | Arrow Home vs. Guangdong Shenglu Telecommunication | Arrow Home vs. HanS Laser Tech | Arrow Home vs. Changchun Faway Automobile |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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