Correlation Between Caihong Display and Xinjiang Communications
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By analyzing existing cross correlation between Caihong Display Devices and Xinjiang Communications Construction, you can compare the effects of market volatilities on Caihong Display and Xinjiang Communications 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 Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Xinjiang Communications.
Diversification Opportunities for Caihong Display and Xinjiang Communications
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caihong and Xinjiang is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications 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 Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of Caihong Display i.e., Caihong Display and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Caihong Display and Xinjiang Communications
Assuming the 90 days trading horizon Caihong Display Devices is expected to under-perform the Xinjiang Communications. But the stock apears to be less risky and, when comparing its historical volatility, Caihong Display Devices is 1.26 times less risky than Xinjiang Communications. The stock trades about -0.08 of its potential returns per unit of risk. The Xinjiang Communications Construction is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,159 in Xinjiang Communications Construction on September 3, 2024 and sell it today you would earn a total of 121.00 from holding Xinjiang Communications Construction or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Xinjiang Communications Constr
Performance |
| Timeline |
| Caihong Display Devices |
| Xinjiang Communications |
Caihong Display and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Xinjiang Communications
The main advantage of trading using opposite Caihong Display and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Xinjiang Communications 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 Communications will offset losses from the drop in Xinjiang Communications' long position.| Caihong Display vs. Agricultural Bank of | Caihong Display vs. China Construction Bank | Caihong Display vs. Postal Savings Bank | Caihong Display vs. Bank of Communications |
| Xinjiang Communications vs. Cultural Investment Holdings | Xinjiang Communications vs. Gome Telecom Equipment | Xinjiang Communications vs. Bus Online Co | Xinjiang Communications vs. Holitech Technology Co |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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