Correlation Between Xinjiang Baodi and Wuhan Yangtze
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Xinjiang Baodi and Wuhan Yangtze 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 Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Wuhan Yangtze.
Diversification Opportunities for Xinjiang Baodi and Wuhan Yangtze
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and Wuhan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun 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 Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Wuhan Yangtze
Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 7.13 times less return on investment than Wuhan Yangtze. But when comparing it to its historical volatility, Xinjiang Baodi Mining is 2.35 times less risky than Wuhan Yangtze. It trades about 0.08 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,963 in Wuhan Yangtze Communication on August 29, 2024 and sell it today you would earn a total of 622.00 from holding Wuhan Yangtze Communication or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Wuhan Yangtze Commun |
Xinjiang Baodi and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Wuhan Yangtze
The main advantage of trading using opposite Xinjiang Baodi and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze'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 |
| Wuhan Yangtze vs. Yankershop Food Co | Wuhan Yangtze vs. Youyou Foods Co | Wuhan Yangtze vs. Great Sun Foods Co | Wuhan Yangtze vs. Harbin Air Conditioning |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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