Correlation Between Xinjiang Communications and Zhangzhou Pientzehuang
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By analyzing existing cross correlation between Xinjiang Communications Construction and Zhangzhou Pientzehuang Pharmaceutical, you can compare the effects of market volatilities on Xinjiang Communications and Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Zhangzhou Pientzehuang.
Diversification Opportunities for Xinjiang Communications and Zhangzhou Pientzehuang
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Zhangzhou is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and Zhangzhou Pientzehuang Pharmac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangzhou Pientzehuang has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and Zhangzhou Pientzehuang go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Zhangzhou Pientzehuang
Assuming the 90 days trading horizon Xinjiang Communications Construction is expected to generate 1.51 times more return on investment than Zhangzhou Pientzehuang. However, Xinjiang Communications is 1.51 times more volatile than Zhangzhou Pientzehuang Pharmaceutical. It trades about -0.01 of its potential returns per unit of risk. Zhangzhou Pientzehuang Pharmaceutical is currently generating about -0.03 per unit of risk. If you would invest 1,656 in Xinjiang Communications Construction on September 12, 2024 and sell it today you would lose (364.00) from holding Xinjiang Communications Construction or give up 21.98% 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. Zhangzhou Pientzehuang Pharmac
Performance |
| Timeline |
| Xinjiang Communications |
| Zhangzhou Pientzehuang |
Xinjiang Communications and Zhangzhou Pientzehuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Zhangzhou Pientzehuang
The main advantage of trading using opposite Xinjiang Communications and Zhangzhou Pientzehuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, Zhangzhou Pientzehuang 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 Zhangzhou Pientzehuang will offset losses from the drop in Zhangzhou Pientzehuang's long position.| Xinjiang Communications vs. Agricultural Bank of | Xinjiang Communications vs. Industrial and Commercial | Xinjiang Communications vs. Bank of China | Xinjiang Communications vs. PetroChina Co Ltd |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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