Correlation Between Caihong Display and Xingguang Agricultural
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By analyzing existing cross correlation between Caihong Display Devices and Xingguang Agricultural Mach, you can compare the effects of market volatilities on Caihong Display and Xingguang Agricultural 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 Xingguang Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Xingguang Agricultural.
Diversification Opportunities for Caihong Display and Xingguang Agricultural
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caihong and Xingguang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Xingguang Agricultural Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xingguang Agricultural 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 Xingguang Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xingguang Agricultural has no effect on the direction of Caihong Display i.e., Caihong Display and Xingguang Agricultural go up and down completely randomly.
Pair Corralation between Caihong Display and Xingguang Agricultural
Assuming the 90 days trading horizon Caihong Display Devices is expected to under-perform the Xingguang Agricultural. But the stock apears to be less risky and, when comparing its historical volatility, Caihong Display Devices is 1.1 times less risky than Xingguang Agricultural. The stock trades about -0.16 of its potential returns per unit of risk. The Xingguang Agricultural Mach is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 912.00 in Xingguang Agricultural Mach on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Xingguang Agricultural Mach or generate 0.22% 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. Xingguang Agricultural Mach
Performance |
| Timeline |
| Caihong Display Devices |
| Xingguang Agricultural |
Caihong Display and Xingguang Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Xingguang Agricultural
The main advantage of trading using opposite Caihong Display and Xingguang Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Xingguang Agricultural 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 Xingguang Agricultural will offset losses from the drop in Xingguang Agricultural's long position.| Caihong Display vs. Eastroc Beverage Group | Caihong Display vs. Fujian Anjoy Foods | Caihong Display vs. Huatian Hotel Group | Caihong Display vs. Beijing Sanyuan Foods |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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