Correlation Between Xinjiang Communications and Xinjiang Tianshun
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By analyzing existing cross correlation between Xinjiang Communications Construction and Xinjiang Tianshun Supply, you can compare the effects of market volatilities on Xinjiang Communications and Xinjiang Tianshun 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 Xinjiang Tianshun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Xinjiang Tianshun.
Diversification Opportunities for Xinjiang Communications and Xinjiang Tianshun
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xinjiang and Xinjiang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and Xinjiang Tianshun Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianshun Supply 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 Xinjiang Tianshun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianshun Supply has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and Xinjiang Tianshun go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Xinjiang Tianshun
Assuming the 90 days trading horizon Xinjiang Communications is expected to generate 1.52 times less return on investment than Xinjiang Tianshun. In addition to that, Xinjiang Communications is 1.06 times more volatile than Xinjiang Tianshun Supply. It trades about 0.07 of its total potential returns per unit of risk. Xinjiang Tianshun Supply is currently generating about 0.11 per unit of volatility. If you would invest 1,174 in Xinjiang Tianshun Supply on September 5, 2024 and sell it today you would earn a total of 166.00 from holding Xinjiang Tianshun Supply or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Communications Constr vs. Xinjiang Tianshun Supply
Performance |
| Timeline |
| Xinjiang Communications |
| Xinjiang Tianshun Supply |
Xinjiang Communications and Xinjiang Tianshun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Xinjiang Tianshun
The main advantage of trading using opposite Xinjiang Communications and Xinjiang Tianshun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, Xinjiang Tianshun 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 Xinjiang Tianshun will offset losses from the drop in Xinjiang Tianshun's long position.The idea behind Xinjiang Communications Construction and Xinjiang Tianshun Supply 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.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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