Correlation Between Xinjiang Communications and China Securities
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By analyzing existing cross correlation between Xinjiang Communications Construction and China Securities 800, you can compare the effects of market volatilities on Xinjiang Communications and China Securities 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 China Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and China Securities.
Diversification Opportunities for Xinjiang Communications and China Securities
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and China is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and China Securities 800 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Securities 800 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 China Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Securities 800 has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and China Securities go up and down completely randomly.
Pair Corralation between Xinjiang Communications and China Securities
Assuming the 90 days trading horizon Xinjiang Communications Construction is expected to generate 1.84 times more return on investment than China Securities. However, Xinjiang Communications is 1.84 times more volatile than China Securities 800. It trades about 0.11 of its potential returns per unit of risk. China Securities 800 is currently generating about 0.09 per unit of risk. If you would invest 864.00 in Xinjiang Communications Construction on September 21, 2024 and sell it today you would earn a total of 325.00 from holding Xinjiang Communications Construction or generate 37.62% 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. China Securities 800
Performance |
| Timeline |
Xinjiang Communications and China Securities Volatility Contrast
Predicted Return Density |
| Returns |
Xinjiang Communications Construction
Pair trading matchups for Xinjiang Communications
China Securities 800
Pair trading matchups for China Securities
Pair Trading with Xinjiang Communications and China Securities
The main advantage of trading using opposite Xinjiang Communications and China Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, China Securities 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 China Securities will offset losses from the drop in China Securities' long position.| Xinjiang Communications vs. Industrial and Commercial | Xinjiang Communications vs. Kweichow Moutai Co | Xinjiang Communications vs. Agricultural Bank of | Xinjiang Communications vs. China Mobile Limited |
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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