Correlation Between Xiamen CD and Sichuan Fulin
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By analyzing existing cross correlation between Xiamen CD and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Xiamen CD and Sichuan Fulin 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 CD with a short position of Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen CD and Sichuan Fulin.
Diversification Opportunities for Xiamen CD and Sichuan Fulin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiamen and Sichuan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen CD and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp and Xiamen CD 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 CD are associated (or correlated) with Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Xiamen CD i.e., Xiamen CD and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Xiamen CD and Sichuan Fulin
Assuming the 90 days trading horizon Xiamen CD is expected to generate 2.28 times less return on investment than Sichuan Fulin. In addition to that, Xiamen CD is 1.13 times more volatile than Sichuan Fulin Transportation. It trades about 0.11 of its total potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about 0.28 per unit of volatility. If you would invest 618.00 in Sichuan Fulin Transportation on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Sichuan Fulin Transportation or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen CD vs. Sichuan Fulin Transportation
Performance |
| Timeline |
| Xiamen CD |
| Sichuan Fulin Transp |
Xiamen CD and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen CD and Sichuan Fulin
The main advantage of trading using opposite Xiamen CD and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen CD position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin's long position.| Xiamen CD vs. Lander Sports Development | Xiamen CD vs. Sportsoul Co Ltd | Xiamen CD vs. Zhejiang Daily Media | Xiamen CD vs. Inly Media Co |
| Sichuan Fulin vs. Nanjing Putian Telecommunications | Sichuan Fulin vs. Shenzhen Hifuture Electric | Sichuan Fulin vs. Tianjin Realty Development | Sichuan Fulin vs. Shenyang Huitian Thermal |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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