Correlation Between Xinjiang Baodi and Digital China
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Digital China Information, you can compare the effects of market volatilities on Xinjiang Baodi and Digital China 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 Xinjiang Baodi with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Digital China.
Diversification Opportunities for Xinjiang Baodi and Digital China
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinjiang and Digital is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and Xinjiang Baodi 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 Xinjiang Baodi Mining are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Digital China go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Digital China
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to generate 0.98 times more return on investment than Digital China. However, Xinjiang Baodi Mining is 1.03 times less risky than Digital China. It trades about 0.02 of its potential returns per unit of risk. Digital China Information is currently generating about 0.01 per unit of risk. If you would invest 604.00 in Xinjiang Baodi Mining on October 11, 2024 and sell it today you would earn a total of 67.00 from holding Xinjiang Baodi Mining or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.71% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Digital China Information
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Digital China Information |
Xinjiang Baodi and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Digital China
The main advantage of trading using opposite Xinjiang Baodi and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Xinjiang Baodi vs. Huasi Agricultural Development | Xinjiang Baodi vs. Fujian Anjoy Foods | Xinjiang Baodi vs. Shantou Wanshun Package | Xinjiang Baodi vs. Long Yuan Construction |
| Digital China vs. China Minmetals Rare | Digital China vs. Xinjiang Baodi Mining | Digital China vs. Lotus Health Group | Digital China vs. Hefei Metalforming Mach |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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