Correlation Between Pengxin International and Xinjiang Tianrun
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By analyzing existing cross correlation between Pengxin International Mining and Xinjiang Tianrun Dairy, you can compare the effects of market volatilities on Pengxin International and Xinjiang Tianrun 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 Xinjiang Tianrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Xinjiang Tianrun.
Diversification Opportunities for Pengxin International and Xinjiang Tianrun
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pengxin and Xinjiang is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Xinjiang Tianrun Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianrun Dairy 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 Xinjiang Tianrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianrun Dairy has no effect on the direction of Pengxin International i.e., Pengxin International and Xinjiang Tianrun go up and down completely randomly.
Pair Corralation between Pengxin International and Xinjiang Tianrun
Assuming the 90 days trading horizon Pengxin International Mining is expected to generate 1.63 times more return on investment than Xinjiang Tianrun. However, Pengxin International is 1.63 times more volatile than Xinjiang Tianrun Dairy. It trades about -0.1 of its potential returns per unit of risk. Xinjiang Tianrun Dairy is currently generating about -0.27 per unit of risk. If you would invest 348.00 in Pengxin International Mining on October 12, 2024 and sell it today you would lose (43.00) from holding Pengxin International Mining or give up 12.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Xinjiang Tianrun Dairy
Performance |
| Timeline |
| Pengxin International |
| Xinjiang Tianrun Dairy |
Pengxin International and Xinjiang Tianrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Xinjiang Tianrun
The main advantage of trading using opposite Pengxin International and Xinjiang Tianrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Xinjiang Tianrun 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 Xinjiang Tianrun will offset losses from the drop in Xinjiang Tianrun's long position.The idea behind Pengxin International Mining and Xinjiang Tianrun Dairy 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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