Correlation Between Xinjiang Baodi and Guangdong Electric
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Guangdong Electric Power, you can compare the effects of market volatilities on Xinjiang Baodi and Guangdong Electric 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 Guangdong Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Guangdong Electric.
Diversification Opportunities for Xinjiang Baodi and Guangdong Electric
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xinjiang and Guangdong is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Guangdong Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Electric Power 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 Guangdong Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Electric Power has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Guangdong Electric go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Guangdong Electric
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to under-perform the Guangdong Electric. In addition to that, Xinjiang Baodi is 4.98 times more volatile than Guangdong Electric Power. It trades about -0.19 of its total potential returns per unit of risk. Guangdong Electric Power is currently generating about -0.06 per unit of volatility. If you would invest 199.00 in Guangdong Electric Power on November 7, 2024 and sell it today you would lose (1.00) from holding Guangdong Electric Power or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Guangdong Electric Power
Performance |
| Timeline |
| Xinjiang Baodi Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong Electric Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xinjiang Baodi and Guangdong Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Guangdong Electric
The main advantage of trading using opposite Xinjiang Baodi and Guangdong Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Guangdong Electric 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 Guangdong Electric will offset losses from the drop in Guangdong Electric's long position.The idea behind Xinjiang Baodi Mining and Guangdong Electric Power pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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