Correlation Between Wuhan Xianglong and Xilinmen Furniture
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By analyzing existing cross correlation between Wuhan Xianglong Power and Xilinmen Furniture Co, you can compare the effects of market volatilities on Wuhan Xianglong and Xilinmen Furniture 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 Wuhan Xianglong with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Xianglong and Xilinmen Furniture.
Diversification Opportunities for Wuhan Xianglong and Xilinmen Furniture
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuhan and Xilinmen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Xianglong Power and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture and Wuhan Xianglong 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 Wuhan Xianglong Power are associated (or correlated) with Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Wuhan Xianglong i.e., Wuhan Xianglong and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Wuhan Xianglong and Xilinmen Furniture
Assuming the 90 days trading horizon Wuhan Xianglong Power is expected to generate 1.45 times more return on investment than Xilinmen Furniture. However, Wuhan Xianglong is 1.45 times more volatile than Xilinmen Furniture Co. It trades about 0.05 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.02 per unit of risk. If you would invest 851.00 in Wuhan Xianglong Power on September 4, 2024 and sell it today you would earn a total of 431.00 from holding Wuhan Xianglong Power or generate 50.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Xianglong Power vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Wuhan Xianglong Power |
| Xilinmen Furniture |
Wuhan Xianglong and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Xianglong and Xilinmen Furniture
The main advantage of trading using opposite Wuhan Xianglong and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Xianglong position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture's long position.| Wuhan Xianglong vs. Hengdian Entertainment Co | Wuhan Xianglong vs. Qingdao Citymedia Co | Wuhan Xianglong vs. Shuhua Sports Co | Wuhan Xianglong vs. Heilongjiang Publishing Media |
| Xilinmen Furniture vs. Industrial and Commercial | Xilinmen Furniture vs. Agricultural Bank of | Xilinmen Furniture vs. China Construction Bank | Xilinmen Furniture vs. Bank of China |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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