Correlation Between Xinjiang Baodi and Shanghai Jinfeng
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Shanghai Jinfeng Wine, you can compare the effects of market volatilities on Xinjiang Baodi and Shanghai Jinfeng 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 Shanghai Jinfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Shanghai Jinfeng.
Diversification Opportunities for Xinjiang Baodi and Shanghai Jinfeng
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xinjiang and Shanghai is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Shanghai Jinfeng Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Jinfeng 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 Shanghai Jinfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Jinfeng Wine has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Shanghai Jinfeng go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Shanghai Jinfeng
Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 1.54 times less return on investment than Shanghai Jinfeng. But when comparing it to its historical volatility, Xinjiang Baodi Mining is 1.09 times less risky than Shanghai Jinfeng. It trades about 0.13 of its potential returns per unit of risk. Shanghai Jinfeng Wine is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 440.00 in Shanghai Jinfeng Wine on September 2, 2024 and sell it today you would earn a total of 154.00 from holding Shanghai Jinfeng Wine or generate 35.0% 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. Shanghai Jinfeng Wine
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Shanghai Jinfeng Wine |
Xinjiang Baodi and Shanghai Jinfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Shanghai Jinfeng
The main advantage of trading using opposite Xinjiang Baodi and Shanghai Jinfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Shanghai Jinfeng 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 Shanghai Jinfeng will offset losses from the drop in Shanghai Jinfeng'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 |
| Shanghai Jinfeng vs. China Petroleum Chemical | Shanghai Jinfeng vs. PetroChina Co Ltd | Shanghai Jinfeng vs. China State Construction | Shanghai Jinfeng vs. China Railway Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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