Correlation Between Xinjiang Communications and Minmetals Capital
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By analyzing existing cross correlation between Xinjiang Communications Construction and Minmetals Capital Co, you can compare the effects of market volatilities on Xinjiang Communications and Minmetals Capital 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 Minmetals Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Minmetals Capital.
Diversification Opportunities for Xinjiang Communications and Minmetals Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Minmetals is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and Minmetals Capital Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minmetals Capital 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 Minmetals Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minmetals Capital has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and Minmetals Capital go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Minmetals Capital
Assuming the 90 days trading horizon Xinjiang Communications Construction is expected to generate 1.03 times more return on investment than Minmetals Capital. However, Xinjiang Communications is 1.03 times more volatile than Minmetals Capital Co. It trades about -0.19 of its potential returns per unit of risk. Minmetals Capital Co is currently generating about -0.28 per unit of risk. If you would invest 1,189 in Xinjiang Communications Construction on October 20, 2024 and sell it today you would lose (109.00) from holding Xinjiang Communications Construction or give up 9.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Communications Constr vs. Minmetals Capital Co
Performance |
| Timeline |
| Xinjiang Communications |
| Minmetals Capital |
Xinjiang Communications and Minmetals Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Minmetals Capital
The main advantage of trading using opposite Xinjiang Communications and Minmetals Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, Minmetals Capital 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 Minmetals Capital will offset losses from the drop in Minmetals Capital's long position.The idea behind Xinjiang Communications Construction and Minmetals Capital Co 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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