Correlation Between Xinjiang Baodi and Maoming Petro
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Xinjiang Baodi and Maoming Petro 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 Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Maoming Petro.
Diversification Opportunities for Xinjiang Baodi and Maoming Petro
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xinjiang and Maoming is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical 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 Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Maoming Petro go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Maoming Petro
Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 1.27 times less return on investment than Maoming Petro. But when comparing it to its historical volatility, Xinjiang Baodi Mining is 1.17 times less risky than Maoming Petro. It trades about 0.05 of its potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 353.00 in Maoming Petro Chemical Shihua on September 1, 2024 and sell it today you would earn a total of 47.00 from holding Maoming Petro Chemical Shihua or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Maoming Petro Chemical |
Xinjiang Baodi and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Maoming Petro
The main advantage of trading using opposite Xinjiang Baodi and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
| Maoming Petro vs. Chongqing Brewery Co | Maoming Petro vs. Changchun Engley Automobile | Maoming Petro vs. Glodon Software Co | Maoming Petro vs. Dhc Software Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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