Correlation Between Nantong Jiangshan and Xiwang Foodstuffs
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By analyzing existing cross correlation between Nantong Jiangshan Agrochemical and Xiwang Foodstuffs Co, you can compare the effects of market volatilities on Nantong Jiangshan and Xiwang Foodstuffs 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 Nantong Jiangshan with a short position of Xiwang Foodstuffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantong Jiangshan and Xiwang Foodstuffs.
Diversification Opportunities for Nantong Jiangshan and Xiwang Foodstuffs
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nantong and Xiwang is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nantong Jiangshan Agrochemical and Xiwang Foodstuffs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Foodstuffs and Nantong Jiangshan 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 Nantong Jiangshan Agrochemical are associated (or correlated) with Xiwang Foodstuffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Foodstuffs has no effect on the direction of Nantong Jiangshan i.e., Nantong Jiangshan and Xiwang Foodstuffs go up and down completely randomly.
Pair Corralation between Nantong Jiangshan and Xiwang Foodstuffs
Assuming the 90 days trading horizon Nantong Jiangshan Agrochemical is expected to under-perform the Xiwang Foodstuffs. But the stock apears to be less risky and, when comparing its historical volatility, Nantong Jiangshan Agrochemical is 1.56 times less risky than Xiwang Foodstuffs. The stock trades about -0.02 of its potential returns per unit of risk. The Xiwang Foodstuffs Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Xiwang Foodstuffs Co on September 3, 2024 and sell it today you would earn a total of 85.00 from holding Xiwang Foodstuffs Co or generate 25.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nantong Jiangshan Agrochemical vs. Xiwang Foodstuffs Co
Performance |
| Timeline |
| Nantong Jiangshan |
| Xiwang Foodstuffs |
Nantong Jiangshan and Xiwang Foodstuffs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nantong Jiangshan and Xiwang Foodstuffs
The main advantage of trading using opposite Nantong Jiangshan and Xiwang Foodstuffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantong Jiangshan position performs unexpectedly, Xiwang Foodstuffs 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 Xiwang Foodstuffs will offset losses from the drop in Xiwang Foodstuffs' long position.| Nantong Jiangshan vs. Shandong Huifa Foodstuff | Nantong Jiangshan vs. Shanghai Ziyan Foods | Nantong Jiangshan vs. Shantou Wanshun Package | Nantong Jiangshan vs. Beijing Sanyuan Foods |
| Xiwang Foodstuffs vs. Beijing Wantai Biological | Xiwang Foodstuffs vs. Aluminum Corp of | Xiwang Foodstuffs vs. COL Digital Publishing | Xiwang Foodstuffs vs. Shaanxi Meineng Clean |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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