Correlation Between Xinjiang Communications and Minami Acoustics
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By analyzing existing cross correlation between Xinjiang Communications Construction and Minami Acoustics Ltd, you can compare the effects of market volatilities on Xinjiang Communications and Minami Acoustics 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 Minami Acoustics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Minami Acoustics.
Diversification Opportunities for Xinjiang Communications and Minami Acoustics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xinjiang and Minami is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and Minami Acoustics Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minami Acoustics 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 Minami Acoustics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minami Acoustics has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and Minami Acoustics go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Minami Acoustics
Assuming the 90 days trading horizon Xinjiang Communications Construction is expected to under-perform the Minami Acoustics. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Communications Construction is 3.33 times less risky than Minami Acoustics. The stock trades about -0.01 of its potential returns per unit of risk. The Minami Acoustics Ltd is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,180 in Minami Acoustics Ltd on November 3, 2024 and sell it today you would earn a total of 850.00 from holding Minami Acoustics Ltd or generate 16.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Communications Constr vs. Minami Acoustics Ltd
Performance |
| Timeline |
| Xinjiang Communications |
| Minami Acoustics |
Xinjiang Communications and Minami Acoustics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Minami Acoustics
The main advantage of trading using opposite Xinjiang Communications and Minami Acoustics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, Minami Acoustics 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 Minami Acoustics will offset losses from the drop in Minami Acoustics' long position.The idea behind Xinjiang Communications Construction and Minami Acoustics Ltd 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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