Correlation Between Xiamen Jihong and Dalian Thermal
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By analyzing existing cross correlation between Xiamen Jihong Package and Dalian Thermal Power, you can compare the effects of market volatilities on Xiamen Jihong and Dalian Thermal 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 Jihong with a short position of Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Jihong and Dalian Thermal.
Diversification Opportunities for Xiamen Jihong and Dalian Thermal
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Dalian is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Jihong Package and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power and Xiamen Jihong 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 Jihong Package are associated (or correlated) with Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Xiamen Jihong i.e., Xiamen Jihong and Dalian Thermal go up and down completely randomly.
Pair Corralation between Xiamen Jihong and Dalian Thermal
Assuming the 90 days trading horizon Xiamen Jihong is expected to generate 14.39 times less return on investment than Dalian Thermal. But when comparing it to its historical volatility, Xiamen Jihong Package is 1.15 times less risky than Dalian Thermal. It trades about 0.0 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 557.00 in Dalian Thermal Power on October 16, 2024 and sell it today you would earn a total of 64.00 from holding Dalian Thermal Power or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Jihong Package vs. Dalian Thermal Power
Performance |
| Timeline |
| Xiamen Jihong Package |
| Dalian Thermal Power |
Xiamen Jihong and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Jihong and Dalian Thermal
The main advantage of trading using opposite Xiamen Jihong and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Jihong position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Xiamen Jihong vs. SSAW Hotels Resorts | Xiamen Jihong vs. Haima Automobile Group | Xiamen Jihong vs. Ningbo Fangzheng Automobile | Xiamen Jihong vs. Hubei Geoway Investment |
| Dalian Thermal vs. Chengdu Xingrong Investment | Dalian Thermal vs. Hubei Geoway Investment | Dalian Thermal vs. Rising Nonferrous Metals | Dalian Thermal vs. Hunan Investment Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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