Correlation Between Dalian Thermal and Xiamen Jihong
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By analyzing existing cross correlation between Dalian Thermal Power and Xiamen Jihong Package, you can compare the effects of market volatilities on Dalian Thermal and Xiamen Jihong 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 Dalian Thermal with a short position of Xiamen Jihong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Xiamen Jihong.
Diversification Opportunities for Dalian Thermal and Xiamen Jihong
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalian and Xiamen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Xiamen Jihong Package in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Jihong Package and Dalian Thermal 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 Dalian Thermal Power are associated (or correlated) with Xiamen Jihong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Jihong Package has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Xiamen Jihong go up and down completely randomly.
Pair Corralation between Dalian Thermal and Xiamen Jihong
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 1.15 times more return on investment than Xiamen Jihong. However, Dalian Thermal is 1.15 times more volatile than Xiamen Jihong Package. It trades about 0.03 of its potential returns per unit of risk. Xiamen Jihong Package is currently generating about 0.0 per unit of risk. If you would invest 557.00 in Dalian Thermal Power on October 16, 2024 and sell it today you would earn a total of 64.00 from holding Dalian Thermal Power or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Thermal Power vs. Xiamen Jihong Package
Performance |
| Timeline |
| Dalian Thermal Power |
| Xiamen Jihong Package |
Dalian Thermal and Xiamen Jihong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Xiamen Jihong
The main advantage of trading using opposite Dalian Thermal and Xiamen Jihong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Xiamen Jihong 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 Xiamen Jihong will offset losses from the drop in Xiamen Jihong's long position.| Dalian Thermal vs. Chengdu Xingrong Investment | Dalian Thermal vs. Hubei Geoway Investment | Dalian Thermal vs. Rising Nonferrous Metals | Dalian Thermal vs. Hunan Investment Group |
| Xiamen Jihong vs. SSAW Hotels Resorts | Xiamen Jihong vs. Haima Automobile Group | Xiamen Jihong vs. Ningbo Fangzheng Automobile | Xiamen Jihong vs. Hubei Geoway Investment |
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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