Correlation Between Xinjiang Communications and Caihong Display
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By analyzing existing cross correlation between Xinjiang Communications Construction and Caihong Display Devices, you can compare the effects of market volatilities on Xinjiang Communications and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Caihong Display.
Diversification Opportunities for Xinjiang Communications and Caihong Display
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and Caihong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and Caihong Display go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Caihong Display
Assuming the 90 days trading horizon Xinjiang Communications Construction is expected to generate 1.26 times more return on investment than Caihong Display. However, Xinjiang Communications is 1.26 times more volatile than Caihong Display Devices. It trades about 0.18 of its potential returns per unit of risk. Caihong Display Devices is currently generating about -0.08 per unit of risk. If you would invest 1,159 in Xinjiang Communications Construction on September 3, 2024 and sell it today you would earn a total of 121.00 from holding Xinjiang Communications Construction or generate 10.44% 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. Caihong Display Devices
Performance |
| Timeline |
| Xinjiang Communications |
| Caihong Display Devices |
Xinjiang Communications and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Caihong Display
The main advantage of trading using opposite Xinjiang Communications and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display's long position.| Xinjiang Communications vs. Cultural Investment Holdings | Xinjiang Communications vs. Gome Telecom Equipment | Xinjiang Communications vs. Bus Online Co | Xinjiang Communications vs. Holitech Technology Co |
| Caihong Display vs. Agricultural Bank of | Caihong Display vs. China Construction Bank | Caihong Display vs. Postal Savings Bank | Caihong Display vs. Bank of Communications |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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