Correlation Between China Fund and Xinke Material
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By analyzing existing cross correlation between China Fund Management and Xinke Material, you can compare the effects of market volatilities on China Fund and Xinke Material 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 China Fund with a short position of Xinke Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Fund and Xinke Material.
Diversification Opportunities for China Fund and Xinke Material
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Xinke is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding China Fund Management and Xinke Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinke Material and China Fund 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 China Fund Management are associated (or correlated) with Xinke Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinke Material has no effect on the direction of China Fund i.e., China Fund and Xinke Material go up and down completely randomly.
Pair Corralation between China Fund and Xinke Material
Assuming the 90 days trading horizon China Fund is expected to generate 8.15 times less return on investment than Xinke Material. But when comparing it to its historical volatility, China Fund Management is 10.83 times less risky than Xinke Material. It trades about 0.08 of its potential returns per unit of risk. Xinke Material is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 228.00 in Xinke Material on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Xinke Material or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Fund Management vs. Xinke Material
Performance |
| Timeline |
| China Fund Management |
| Xinke Material |
China Fund and Xinke Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Fund and Xinke Material
The main advantage of trading using opposite China Fund and Xinke Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Fund position performs unexpectedly, Xinke Material 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 Xinke Material will offset losses from the drop in Xinke Material's long position.| China Fund vs. Industrial and Commercial | China Fund vs. Kweichow Moutai Co | China Fund vs. Agricultural Bank of | China Fund vs. China Mobile Limited |
| Xinke Material vs. Gome Telecom Equipment | Xinke Material vs. Eastern Communications Co | Xinke Material vs. Tongyu Communication | Xinke Material vs. Everdisplay Optronics Shanghai |
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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