Correlation Between Markor International and Xiamen Goldenhome
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By analyzing existing cross correlation between Markor International Home and Xiamen Goldenhome Co, you can compare the effects of market volatilities on Markor International and Xiamen Goldenhome 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 Markor International with a short position of Xiamen Goldenhome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markor International and Xiamen Goldenhome.
Diversification Opportunities for Markor International and Xiamen Goldenhome
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Markor and Xiamen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Markor International Home and Xiamen Goldenhome Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Goldenhome and Markor International 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 Markor International Home are associated (or correlated) with Xiamen Goldenhome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Goldenhome has no effect on the direction of Markor International i.e., Markor International and Xiamen Goldenhome go up and down completely randomly.
Pair Corralation between Markor International and Xiamen Goldenhome
Assuming the 90 days trading horizon Markor International Home is expected to under-perform the Xiamen Goldenhome. In addition to that, Markor International is 1.8 times more volatile than Xiamen Goldenhome Co. It trades about -0.14 of its total potential returns per unit of risk. Xiamen Goldenhome Co is currently generating about 0.22 per unit of volatility. If you would invest 1,886 in Xiamen Goldenhome Co on November 5, 2024 and sell it today you would earn a total of 108.00 from holding Xiamen Goldenhome Co or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Markor International Home vs. Xiamen Goldenhome Co
Performance |
| Timeline |
| Markor International Home |
| Xiamen Goldenhome |
Markor International and Xiamen Goldenhome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Markor International and Xiamen Goldenhome
The main advantage of trading using opposite Markor International and Xiamen Goldenhome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markor International position performs unexpectedly, Xiamen Goldenhome 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 Goldenhome will offset losses from the drop in Xiamen Goldenhome's long position.The idea behind Markor International Home and Xiamen Goldenhome 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 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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