Correlation Between Xinjiang Baodi and Gansu Huangtai
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on Xinjiang Baodi and Gansu Huangtai 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 Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Gansu Huangtai.
Diversification Opportunities for Xinjiang Baodi and Gansu Huangtai
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xinjiang and Gansu is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine 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 Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Gansu Huangtai go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Gansu Huangtai
Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 1.41 times less return on investment than Gansu Huangtai. But when comparing it to its historical volatility, Xinjiang Baodi Mining is 1.61 times less risky than Gansu Huangtai. It trades about 0.15 of its potential returns per unit of risk. Gansu Huangtai Wine marketing is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,377 in Gansu Huangtai Wine marketing on September 1, 2024 and sell it today you would earn a total of 153.00 from holding Gansu Huangtai Wine marketing or generate 11.11% 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. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Gansu Huangtai Wine |
Xinjiang Baodi and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Gansu Huangtai
The main advantage of trading using opposite Xinjiang Baodi and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai'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 |
| Gansu Huangtai vs. Shandong Polymer Biochemicals | Gansu Huangtai vs. Ningxia Younglight Chemicals | Gansu Huangtai vs. Huatian Hotel Group | Gansu Huangtai vs. Xiandai Investment 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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