Correlation Between ISoftStone Information and Xiamen Bank
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By analyzing existing cross correlation between iSoftStone Information Technology and Xiamen Bank Co, you can compare the effects of market volatilities on ISoftStone Information and Xiamen Bank 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 ISoftStone Information with a short position of Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISoftStone Information and Xiamen Bank.
Diversification Opportunities for ISoftStone Information and Xiamen Bank
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ISoftStone and Xiamen is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding iSoftStone Information Technol and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Bank and ISoftStone Information 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 iSoftStone Information Technology are associated (or correlated) with Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of ISoftStone Information i.e., ISoftStone Information and Xiamen Bank go up and down completely randomly.
Pair Corralation between ISoftStone Information and Xiamen Bank
Assuming the 90 days trading horizon iSoftStone Information Technology is expected to under-perform the Xiamen Bank. In addition to that, ISoftStone Information is 1.97 times more volatile than Xiamen Bank Co. It trades about -0.08 of its total potential returns per unit of risk. Xiamen Bank Co is currently generating about 0.08 per unit of volatility. If you would invest 518.00 in Xiamen Bank Co on November 6, 2024 and sell it today you would earn a total of 37.00 from holding Xiamen Bank Co or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iSoftStone Information Technol vs. Xiamen Bank Co
Performance |
| Timeline |
| iSoftStone Information |
| Xiamen Bank |
ISoftStone Information and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISoftStone Information and Xiamen Bank
The main advantage of trading using opposite ISoftStone Information and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISoftStone Information position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank's long position.The idea behind iSoftStone Information Technology and Xiamen Bank Co 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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