Correlation Between Xinjiang Communications and Tongding Interconnection
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By analyzing existing cross correlation between Xinjiang Communications Construction and Tongding Interconnection Information, you can compare the effects of market volatilities on Xinjiang Communications and Tongding Interconnection 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 Tongding Interconnection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Tongding Interconnection.
Diversification Opportunities for Xinjiang Communications and Tongding Interconnection
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinjiang and Tongding is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and Tongding Interconnection Infor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongding Interconnection 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 Tongding Interconnection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongding Interconnection has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and Tongding Interconnection go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Tongding Interconnection
Assuming the 90 days trading horizon Xinjiang Communications is expected to generate 1.76 times less return on investment than Tongding Interconnection. But when comparing it to its historical volatility, Xinjiang Communications Construction is 2.1 times less risky than Tongding Interconnection. It trades about 0.15 of its potential returns per unit of risk. Tongding Interconnection Information is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 441.00 in Tongding Interconnection Information on November 8, 2024 and sell it today you would earn a total of 31.00 from holding Tongding Interconnection Information or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Communications Constr vs. Tongding Interconnection Infor
Performance |
| Timeline |
| Xinjiang Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tongding Interconnection |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Xinjiang Communications and Tongding Interconnection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Tongding Interconnection
The main advantage of trading using opposite Xinjiang Communications and Tongding Interconnection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, Tongding Interconnection 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 Tongding Interconnection will offset losses from the drop in Tongding Interconnection's long position.The idea behind Xinjiang Communications Construction and Tongding Interconnection Information pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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