Correlation Between Xiamen Jihong and Shenzhen Transsion
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By analyzing existing cross correlation between Xiamen Jihong Package and Shenzhen Transsion Holdings, you can compare the effects of market volatilities on Xiamen Jihong and Shenzhen Transsion 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 Shenzhen Transsion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Jihong and Shenzhen Transsion.
Diversification Opportunities for Xiamen Jihong and Shenzhen Transsion
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xiamen and Shenzhen is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Jihong Package and Shenzhen Transsion Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Transsion 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 Shenzhen Transsion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Transsion has no effect on the direction of Xiamen Jihong i.e., Xiamen Jihong and Shenzhen Transsion go up and down completely randomly.
Pair Corralation between Xiamen Jihong and Shenzhen Transsion
Assuming the 90 days trading horizon Xiamen Jihong Package is expected to generate 0.8 times more return on investment than Shenzhen Transsion. However, Xiamen Jihong Package is 1.26 times less risky than Shenzhen Transsion. It trades about 0.08 of its potential returns per unit of risk. Shenzhen Transsion Holdings is currently generating about 0.04 per unit of risk. If you would invest 1,237 in Xiamen Jihong Package on September 5, 2024 and sell it today you would earn a total of 338.00 from holding Xiamen Jihong Package or generate 27.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Jihong Package vs. Shenzhen Transsion Holdings
Performance |
| Timeline |
| Xiamen Jihong Package |
| Shenzhen Transsion |
Xiamen Jihong and Shenzhen Transsion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Jihong and Shenzhen Transsion
The main advantage of trading using opposite Xiamen Jihong and Shenzhen Transsion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Jihong position performs unexpectedly, Shenzhen Transsion 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 Shenzhen Transsion will offset losses from the drop in Shenzhen Transsion's long position.| Xiamen Jihong vs. Zijin Mining Group | Xiamen Jihong vs. Wanhua Chemical Group | Xiamen Jihong vs. Baoshan Iron Steel | Xiamen Jihong vs. Rongsheng Petrochemical Co |
| Shenzhen Transsion vs. Eastroc Beverage Group | Shenzhen Transsion vs. Xiamen Jihong Package | Shenzhen Transsion vs. Sinofibers Technology Co | Shenzhen Transsion vs. Northking Information Technology |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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