Correlation Between Xinjiang Baodi and Shandong Longquan
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Xinjiang Baodi and Shandong Longquan 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 Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Shandong Longquan.
Diversification Opportunities for Xinjiang Baodi and Shandong Longquan
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Shandong is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan 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 Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Shandong Longquan go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Shandong Longquan
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to generate 1.22 times more return on investment than Shandong Longquan. However, Xinjiang Baodi is 1.22 times more volatile than Shandong Longquan Pipeline. It trades about 0.04 of its potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about -0.29 per unit of risk. If you would invest 662.00 in Xinjiang Baodi Mining on October 10, 2024 and sell it today you would earn a total of 9.00 from holding Xinjiang Baodi Mining or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Shandong Longquan |
Xinjiang Baodi and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Shandong Longquan
The main advantage of trading using opposite Xinjiang Baodi and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Shandong Longquan 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 Shandong Longquan will offset losses from the drop in Shandong Longquan's long position.| Xinjiang Baodi vs. Sharetronic Data Technology | Xinjiang Baodi vs. Sublime China Information | Xinjiang Baodi vs. Zhejiang Kingland Pipeline | Xinjiang Baodi vs. CITIC Guoan Information |
| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan vs. Shandong Gold Mining |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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