Correlation Between Xinjiang Baodi and Chongqing Road
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Chongqing Road Bridge, you can compare the effects of market volatilities on Xinjiang Baodi and Chongqing Road 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 Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Chongqing Road.
Diversification Opportunities for Xinjiang Baodi and Chongqing Road
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinjiang and Chongqing is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge 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 Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Chongqing Road go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Chongqing Road
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to under-perform the Chongqing Road. In addition to that, Xinjiang Baodi is 1.49 times more volatile than Chongqing Road Bridge. It trades about -0.16 of its total potential returns per unit of risk. Chongqing Road Bridge is currently generating about -0.01 per unit of volatility. If you would invest 550.00 in Chongqing Road Bridge on November 3, 2024 and sell it today you would lose (5.00) from holding Chongqing Road Bridge or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Chongqing Road Bridge
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Chongqing Road Bridge |
Xinjiang Baodi and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Chongqing Road
The main advantage of trading using opposite Xinjiang Baodi and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road'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 |
| Chongqing Road vs. Beijing YanDong MicroElectronic | Chongqing Road vs. Kingclean Electric Co | Chongqing Road vs. Marssenger Kitchenware Co | Chongqing Road vs. TongFu Microelectronics 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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