Correlation Between Tonghua Grape and Xilong Chemical
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By analyzing existing cross correlation between Tonghua Grape Wine and Xilong Chemical Co, you can compare the effects of market volatilities on Tonghua Grape and Xilong Chemical 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 Tonghua Grape with a short position of Xilong Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and Xilong Chemical.
Diversification Opportunities for Tonghua Grape and Xilong Chemical
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tonghua and Xilong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and Xilong Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilong Chemical and Tonghua Grape 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 Tonghua Grape Wine are associated (or correlated) with Xilong Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilong Chemical has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and Xilong Chemical go up and down completely randomly.
Pair Corralation between Tonghua Grape and Xilong Chemical
Assuming the 90 days trading horizon Tonghua Grape Wine is expected to under-perform the Xilong Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Tonghua Grape Wine is 1.55 times less risky than Xilong Chemical. The stock trades about -0.03 of its potential returns per unit of risk. The Xilong Chemical Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 746.00 in Xilong Chemical Co on September 3, 2024 and sell it today you would earn a total of 109.00 from holding Xilong Chemical Co or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tonghua Grape Wine vs. Xilong Chemical Co
Performance |
| Timeline |
| Tonghua Grape Wine |
| Xilong Chemical |
Tonghua Grape and Xilong Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonghua Grape and Xilong Chemical
The main advantage of trading using opposite Tonghua Grape and Xilong Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, Xilong Chemical 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 Xilong Chemical will offset losses from the drop in Xilong Chemical's long position.| Tonghua Grape vs. Beijing Wantai Biological | Tonghua Grape vs. Aluminum Corp of | Tonghua Grape vs. COL Digital Publishing | Tonghua Grape vs. Shaanxi Meineng Clean |
| Xilong Chemical vs. Jiangsu GDK Biotechnology | Xilong Chemical vs. Guangzhou Automobile Group | Xilong Chemical vs. Huaxia Fund Management | Xilong Chemical vs. Songz Automobile Air |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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