Correlation Between Hubei Dinglong and Xilong Chemical
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By analyzing existing cross correlation between Hubei Dinglong Chemical and Xilong Chemical Co, you can compare the effects of market volatilities on Hubei Dinglong and Xilong Chemical 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 Hubei Dinglong with a short position of Xilong Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Dinglong and Xilong Chemical.
Diversification Opportunities for Hubei Dinglong and Xilong Chemical
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Xilong is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Dinglong Chemical and Xilong Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilong Chemical and Hubei Dinglong 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 Hubei Dinglong Chemical are associated (or correlated) with Xilong Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilong Chemical has no effect on the direction of Hubei Dinglong i.e., Hubei Dinglong and Xilong Chemical go up and down completely randomly.
Pair Corralation between Hubei Dinglong and Xilong Chemical
Assuming the 90 days trading horizon Hubei Dinglong is expected to generate 201.45 times less return on investment than Xilong Chemical. But when comparing it to its historical volatility, Hubei Dinglong Chemical is 1.24 times less risky than Xilong Chemical. It trades about 0.0 of its potential returns per unit of risk. Xilong Chemical Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 775.00 in Xilong Chemical Co on August 28, 2024 and sell it today you would earn a total of 28.00 from holding Xilong Chemical Co or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Dinglong Chemical vs. Xilong Chemical Co
Performance |
| Timeline |
| Hubei Dinglong Chemical |
| Xilong Chemical |
Hubei Dinglong and Xilong Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Dinglong and Xilong Chemical
The main advantage of trading using opposite Hubei Dinglong and Xilong Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Dinglong position performs unexpectedly, Xilong Chemical 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 Xilong Chemical will offset losses from the drop in Xilong Chemical's long position.| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining | Hubei Dinglong vs. Rongsheng Petrochemical Co |
| Xilong Chemical vs. Zijin Mining Group | Xilong Chemical vs. Wanhua Chemical Group | Xilong Chemical vs. Baoshan Iron Steel | Xilong Chemical vs. Shandong Gold Mining |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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