Correlation Between XiAn Dagang and Contemporary Amperex
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By analyzing existing cross correlation between XiAn Dagang Road and Contemporary Amperex Technology, you can compare the effects of market volatilities on XiAn Dagang and Contemporary Amperex 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 XiAn Dagang with a short position of Contemporary Amperex. Check out your portfolio center. Please also check ongoing floating volatility patterns of XiAn Dagang and Contemporary Amperex.
Diversification Opportunities for XiAn Dagang and Contemporary Amperex
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XiAn and Contemporary is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding XiAn Dagang Road and Contemporary Amperex Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contemporary Amperex and XiAn Dagang 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 XiAn Dagang Road are associated (or correlated) with Contemporary Amperex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contemporary Amperex has no effect on the direction of XiAn Dagang i.e., XiAn Dagang and Contemporary Amperex go up and down completely randomly.
Pair Corralation between XiAn Dagang and Contemporary Amperex
Assuming the 90 days trading horizon XiAn Dagang Road is expected to generate 1.12 times more return on investment than Contemporary Amperex. However, XiAn Dagang is 1.12 times more volatile than Contemporary Amperex Technology. It trades about 0.14 of its potential returns per unit of risk. Contemporary Amperex Technology is currently generating about 0.12 per unit of risk. If you would invest 592.00 in XiAn Dagang Road on November 9, 2024 and sell it today you would earn a total of 28.00 from holding XiAn Dagang Road or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XiAn Dagang Road vs. Contemporary Amperex Technolog
Performance |
| Timeline |
| XiAn Dagang Road |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Contemporary Amperex |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
XiAn Dagang and Contemporary Amperex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XiAn Dagang and Contemporary Amperex
The main advantage of trading using opposite XiAn Dagang and Contemporary Amperex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XiAn Dagang position performs unexpectedly, Contemporary Amperex 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 Contemporary Amperex will offset losses from the drop in Contemporary Amperex's long position.The idea behind XiAn Dagang Road and Contemporary Amperex Technology 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.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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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