Correlation Between Pengxin International and Qiming Information
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By analyzing existing cross correlation between Pengxin International Mining and Qiming Information Technology, you can compare the effects of market volatilities on Pengxin International and Qiming Information 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 Pengxin International with a short position of Qiming Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Qiming Information.
Diversification Opportunities for Pengxin International and Qiming Information
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pengxin and Qiming is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Qiming Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qiming Information and Pengxin 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 Pengxin International Mining are associated (or correlated) with Qiming Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qiming Information has no effect on the direction of Pengxin International i.e., Pengxin International and Qiming Information go up and down completely randomly.
Pair Corralation between Pengxin International and Qiming Information
Assuming the 90 days trading horizon Pengxin International Mining is expected to under-perform the Qiming Information. In addition to that, Pengxin International is 1.16 times more volatile than Qiming Information Technology. It trades about -0.19 of its total potential returns per unit of risk. Qiming Information Technology is currently generating about -0.13 per unit of volatility. If you would invest 2,028 in Qiming Information Technology on October 28, 2024 and sell it today you would lose (181.00) from holding Qiming Information Technology or give up 8.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Qiming Information Technology
Performance |
| Timeline |
| Pengxin International |
| Qiming Information |
Pengxin International and Qiming Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Qiming Information
The main advantage of trading using opposite Pengxin International and Qiming Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Qiming Information 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 Qiming Information will offset losses from the drop in Qiming Information's long position.The idea behind Pengxin International Mining and Qiming Information Technology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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