Correlation Between Xinjiang Communications and Zhonghong Pulin
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By analyzing existing cross correlation between Xinjiang Communications Construction and Zhonghong Pulin Medical, you can compare the effects of market volatilities on Xinjiang Communications and Zhonghong Pulin 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 Zhonghong Pulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Zhonghong Pulin.
Diversification Opportunities for Xinjiang Communications and Zhonghong Pulin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and Zhonghong is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and Zhonghong Pulin Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhonghong Pulin Medical 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 Zhonghong Pulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhonghong Pulin Medical has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and Zhonghong Pulin go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Zhonghong Pulin
Assuming the 90 days trading horizon Xinjiang Communications Construction is expected to generate 1.13 times more return on investment than Zhonghong Pulin. However, Xinjiang Communications is 1.13 times more volatile than Zhonghong Pulin Medical. It trades about 0.09 of its potential returns per unit of risk. Zhonghong Pulin Medical is currently generating about 0.02 per unit of risk. If you would invest 1,109 in Xinjiang Communications Construction on December 8, 2024 and sell it today you would earn a total of 45.00 from holding Xinjiang Communications Construction or generate 4.06% 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. Zhonghong Pulin Medical
Performance |
| Timeline |
| Xinjiang Communications |
| Zhonghong Pulin Medical |
Xinjiang Communications and Zhonghong Pulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Zhonghong Pulin
The main advantage of trading using opposite Xinjiang Communications and Zhonghong Pulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, Zhonghong Pulin 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 Zhonghong Pulin will offset losses from the drop in Zhonghong Pulin's long position.| Xinjiang Communications vs. Mengtian Home Group | ||
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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