Correlation Between Xinjiang Communications and Chahua Modern
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By analyzing existing cross correlation between Xinjiang Communications Construction and Chahua Modern Housewares, you can compare the effects of market volatilities on Xinjiang Communications and Chahua Modern 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 Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Chahua Modern.
Diversification Opportunities for Xinjiang Communications and Chahua Modern
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xinjiang and Chahua is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares 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 Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Xinjiang Communications i.e., Xinjiang Communications and Chahua Modern go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Chahua Modern
Assuming the 90 days trading horizon Xinjiang Communications is expected to generate 1.58 times less return on investment than Chahua Modern. But when comparing it to its historical volatility, Xinjiang Communications Construction is 1.57 times less risky than Chahua Modern. It trades about 0.18 of its potential returns per unit of risk. Chahua Modern Housewares is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,889 in Chahua Modern Housewares on September 4, 2024 and sell it today you would earn a total of 317.00 from holding Chahua Modern Housewares or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Communications Constr vs. Chahua Modern Housewares
Performance |
| Timeline |
| Xinjiang Communications |
| Chahua Modern Housewares |
Xinjiang Communications and Chahua Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Chahua Modern
The main advantage of trading using opposite Xinjiang Communications and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern's long position.| Xinjiang Communications vs. China Life Insurance | Xinjiang Communications vs. Cinda Securities Co | Xinjiang Communications vs. Piotech Inc A | Xinjiang Communications vs. Dongxing Sec Co |
| Chahua Modern vs. Zhejiang Yayi Metal | Chahua Modern vs. Bomin Electronics Co | Chahua Modern vs. Nantong Haixing Electronics | Chahua Modern vs. Leyard Optoelectronic |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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