Correlation Between Shengtak New and Xinjiang Baodi
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By analyzing existing cross correlation between Shengtak New Material and Xinjiang Baodi Mining, you can compare the effects of market volatilities on Shengtak New and Xinjiang Baodi 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 Shengtak New with a short position of Xinjiang Baodi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengtak New and Xinjiang Baodi.
Diversification Opportunities for Shengtak New and Xinjiang Baodi
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shengtak and Xinjiang is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Shengtak New Material and Xinjiang Baodi Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Baodi Mining and Shengtak New 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 Shengtak New Material are associated (or correlated) with Xinjiang Baodi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Baodi Mining has no effect on the direction of Shengtak New i.e., Shengtak New and Xinjiang Baodi go up and down completely randomly.
Pair Corralation between Shengtak New and Xinjiang Baodi
Assuming the 90 days trading horizon Shengtak New Material is expected to generate 1.28 times more return on investment than Xinjiang Baodi. However, Shengtak New is 1.28 times more volatile than Xinjiang Baodi Mining. It trades about -0.03 of its potential returns per unit of risk. Xinjiang Baodi Mining is currently generating about -0.18 per unit of risk. If you would invest 3,122 in Shengtak New Material on November 8, 2024 and sell it today you would lose (59.00) from holding Shengtak New Material or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengtak New Material vs. Xinjiang Baodi Mining
Performance |
| Timeline |
| Shengtak New Material |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xinjiang Baodi Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shengtak New and Xinjiang Baodi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengtak New and Xinjiang Baodi
The main advantage of trading using opposite Shengtak New and Xinjiang Baodi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengtak New position performs unexpectedly, Xinjiang Baodi 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 Xinjiang Baodi will offset losses from the drop in Xinjiang Baodi's long position.The idea behind Shengtak New Material and Xinjiang Baodi Mining 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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