Correlation Between Xinjiang Communications and ChengDu Hi
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By analyzing existing cross correlation between Xinjiang Communications Construction and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Xinjiang Communications and ChengDu Hi 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 Xinjiang Communications with a short position of ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and ChengDu Hi.
Diversification Opportunities for Xinjiang Communications and ChengDu Hi
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and ChengDu is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech and Xinjiang Communications 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 Xinjiang Communications Construction are associated (or correlated) with ChengDu Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and ChengDu Hi go up and down completely randomly.
Pair Corralation between Xinjiang Communications and ChengDu Hi
Assuming the 90 days trading horizon Xinjiang Communications Construction is expected to generate 0.89 times more return on investment than ChengDu Hi. However, Xinjiang Communications Construction is 1.12 times less risky than ChengDu Hi. It trades about 0.18 of its potential returns per unit of risk. ChengDu Hi Tech Development is currently generating about -0.11 per unit of risk. If you would invest 1,159 in Xinjiang Communications Construction on September 3, 2024 and sell it today you would earn a total of 121.00 from holding Xinjiang Communications Construction or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Communications Constr vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| Xinjiang Communications |
| ChengDu Hi Tech |
Xinjiang Communications and ChengDu Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and ChengDu Hi
The main advantage of trading using opposite Xinjiang Communications and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, ChengDu Hi 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 ChengDu Hi will offset losses from the drop in ChengDu Hi's long position.| Xinjiang Communications vs. Cultural Investment Holdings | Xinjiang Communications vs. Gome Telecom Equipment | Xinjiang Communications vs. Bus Online Co | Xinjiang Communications vs. Holitech Technology Co |
| ChengDu Hi vs. Industrial and Commercial | ChengDu Hi vs. China Construction Bank | ChengDu Hi vs. Bank of China | ChengDu Hi vs. Agricultural Bank of |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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