Correlation Between Caihong Display and Xinjiang Tianshun
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By analyzing existing cross correlation between Caihong Display Devices and Xinjiang Tianshun Supply, you can compare the effects of market volatilities on Caihong Display and Xinjiang Tianshun 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 Caihong Display with a short position of Xinjiang Tianshun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Xinjiang Tianshun.
Diversification Opportunities for Caihong Display and Xinjiang Tianshun
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caihong and Xinjiang is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Xinjiang Tianshun Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianshun Supply and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Xinjiang Tianshun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianshun Supply has no effect on the direction of Caihong Display i.e., Caihong Display and Xinjiang Tianshun go up and down completely randomly.
Pair Corralation between Caihong Display and Xinjiang Tianshun
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 0.77 times more return on investment than Xinjiang Tianshun. However, Caihong Display Devices is 1.3 times less risky than Xinjiang Tianshun. It trades about 0.22 of its potential returns per unit of risk. Xinjiang Tianshun Supply is currently generating about -0.46 per unit of risk. If you would invest 711.00 in Caihong Display Devices on October 7, 2024 and sell it today you would earn a total of 74.00 from holding Caihong Display Devices or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Xinjiang Tianshun Supply
Performance |
| Timeline |
| Caihong Display Devices |
| Xinjiang Tianshun Supply |
Caihong Display and Xinjiang Tianshun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Xinjiang Tianshun
The main advantage of trading using opposite Caihong Display and Xinjiang Tianshun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Xinjiang Tianshun 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 Tianshun will offset losses from the drop in Xinjiang Tianshun's long position.| Caihong Display vs. PetroChina Co Ltd | Caihong Display vs. Gansu Jiu Steel | Caihong Display vs. Aba Chemicals Corp | Caihong Display vs. Yes Optoelectronics Co |
| Xinjiang Tianshun vs. Jinhui Mining Co | Xinjiang Tianshun vs. Iat Automobile Technology | Xinjiang Tianshun vs. Ningbo Fangzheng Automobile | Xinjiang Tianshun vs. Tianjin Silvery Dragon |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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