Correlation Between XiaMen HongXin and Epoxy Base
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By analyzing existing cross correlation between XiaMen HongXin Electron tech and Epoxy Base Electronic, you can compare the effects of market volatilities on XiaMen HongXin and Epoxy Base 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 XiaMen HongXin with a short position of Epoxy Base. Check out your portfolio center. Please also check ongoing floating volatility patterns of XiaMen HongXin and Epoxy Base.
Diversification Opportunities for XiaMen HongXin and Epoxy Base
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XiaMen and Epoxy is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding XiaMen HongXin Electron tech and Epoxy Base Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epoxy Base Electronic and XiaMen HongXin 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 XiaMen HongXin Electron tech are associated (or correlated) with Epoxy Base. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epoxy Base Electronic has no effect on the direction of XiaMen HongXin i.e., XiaMen HongXin and Epoxy Base go up and down completely randomly.
Pair Corralation between XiaMen HongXin and Epoxy Base
Assuming the 90 days trading horizon XiaMen HongXin Electron tech is expected to generate 1.26 times more return on investment than Epoxy Base. However, XiaMen HongXin is 1.26 times more volatile than Epoxy Base Electronic. It trades about 0.05 of its potential returns per unit of risk. Epoxy Base Electronic is currently generating about 0.02 per unit of risk. If you would invest 1,222 in XiaMen HongXin Electron tech on October 28, 2024 and sell it today you would earn a total of 1,055 from holding XiaMen HongXin Electron tech or generate 86.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XiaMen HongXin Electron tech vs. Epoxy Base Electronic
Performance |
| Timeline |
| XiaMen HongXin Electron |
| Epoxy Base Electronic |
XiaMen HongXin and Epoxy Base Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XiaMen HongXin and Epoxy Base
The main advantage of trading using opposite XiaMen HongXin and Epoxy Base positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XiaMen HongXin position performs unexpectedly, Epoxy Base 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 Epoxy Base will offset losses from the drop in Epoxy Base's long position.The idea behind XiaMen HongXin Electron tech and Epoxy Base Electronic 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.
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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