Correlation Between Yingde Greatchem and Xiangyang Automobile
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By analyzing existing cross correlation between Yingde Greatchem Chemicals and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Yingde Greatchem and Xiangyang Automobile 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 Yingde Greatchem with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yingde Greatchem and Xiangyang Automobile.
Diversification Opportunities for Yingde Greatchem and Xiangyang Automobile
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yingde and Xiangyang is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Yingde Greatchem Chemicals and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Yingde Greatchem 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 Yingde Greatchem Chemicals are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Yingde Greatchem i.e., Yingde Greatchem and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Yingde Greatchem and Xiangyang Automobile
Assuming the 90 days trading horizon Yingde Greatchem Chemicals is expected to under-perform the Xiangyang Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Yingde Greatchem Chemicals is 2.07 times less risky than Xiangyang Automobile. The stock trades about -0.13 of its potential returns per unit of risk. The Xiangyang Automobile Bearing is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 653.00 in Xiangyang Automobile Bearing on October 20, 2024 and sell it today you would lose (33.00) from holding Xiangyang Automobile Bearing or give up 5.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yingde Greatchem Chemicals vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Yingde Greatchem Che |
| Xiangyang Automobile |
Yingde Greatchem and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yingde Greatchem and Xiangyang Automobile
The main advantage of trading using opposite Yingde Greatchem and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yingde Greatchem position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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