Correlation Between Xiamen East and 516220
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By analyzing existing cross correlation between Xiamen East Asia and 516220, you can compare the effects of market volatilities on Xiamen East and 516220 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 East with a short position of 516220. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen East and 516220.
Diversification Opportunities for Xiamen East and 516220
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xiamen and 516220 is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen East Asia and 516220 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 516220 and Xiamen East 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 East Asia are associated (or correlated) with 516220. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 516220 has no effect on the direction of Xiamen East i.e., Xiamen East and 516220 go up and down completely randomly.
Pair Corralation between Xiamen East and 516220
Assuming the 90 days trading horizon Xiamen East Asia is expected to generate 1.3 times more return on investment than 516220. However, Xiamen East is 1.3 times more volatile than 516220. It trades about 0.13 of its potential returns per unit of risk. 516220 is currently generating about 0.12 per unit of risk. If you would invest 857.00 in Xiamen East Asia on August 28, 2024 and sell it today you would earn a total of 216.00 from holding Xiamen East Asia or generate 25.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen East Asia vs. 516220
Performance |
| Timeline |
| Xiamen East Asia |
| 516220 |
Xiamen East and 516220 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen East and 516220
The main advantage of trading using opposite Xiamen East and 516220 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen East position performs unexpectedly, 516220 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 516220 will offset losses from the drop in 516220's long position.| Xiamen East vs. Jinhui Mining Co | Xiamen East vs. Zhengzhou Coal Mining | Xiamen East vs. Bus Online Co | Xiamen East vs. Xiangyang Automobile Bearing |
| 516220 vs. Shenzhen MTC Co | 516220 vs. Ming Yang Smart | 516220 vs. Changzhou Almaden Co | 516220 vs. 159005 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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