Correlation Between Cinda Securities and Xinjiang Communications
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By analyzing existing cross correlation between Cinda Securities Co and Xinjiang Communications Construction, you can compare the effects of market volatilities on Cinda Securities 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 Cinda Securities with a short position of Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinda Securities and Xinjiang Communications.
Diversification Opportunities for Cinda Securities and Xinjiang Communications
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cinda and Xinjiang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cinda Securities Co and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications and Cinda Securities 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 Cinda Securities Co 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 Cinda Securities i.e., Cinda Securities and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Cinda Securities and Xinjiang Communications
Assuming the 90 days trading horizon Cinda Securities Co is expected to under-perform the Xinjiang Communications. In addition to that, Cinda Securities is 1.27 times more volatile than Xinjiang Communications Construction. It trades about -0.19 of its total potential returns per unit of risk. Xinjiang Communications Construction is currently generating about 0.06 per unit of volatility. If you would invest 1,269 in Xinjiang Communications Construction on September 12, 2024 and sell it today you would earn a total of 23.00 from holding Xinjiang Communications Construction or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cinda Securities Co vs. Xinjiang Communications Constr
Performance |
| Timeline |
| Cinda Securities |
| Xinjiang Communications |
Cinda Securities and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinda Securities and Xinjiang Communications
The main advantage of trading using opposite Cinda Securities and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinda Securities 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.| Cinda Securities vs. China Petroleum Chemical | Cinda Securities vs. PetroChina Co Ltd | Cinda Securities vs. China Mobile Limited | Cinda Securities vs. Industrial and Commercial |
| Xinjiang Communications vs. Agricultural Bank of | Xinjiang Communications vs. Industrial and Commercial | Xinjiang Communications vs. Bank of China | Xinjiang Communications vs. PetroChina Co Ltd |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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