Correlation Between Xinjiang Baodi and Guangzhou Restaurants
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Xinjiang Baodi and Guangzhou Restaurants 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 Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Guangzhou Restaurants.
Diversification Opportunities for Xinjiang Baodi and Guangzhou Restaurants
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and Guangzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Guangzhou Restaurants
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to generate 1.48 times more return on investment than Guangzhou Restaurants. However, Xinjiang Baodi is 1.48 times more volatile than Guangzhou Restaurants Group. It trades about 0.02 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about -0.04 per unit of risk. If you would invest 604.00 in Xinjiang Baodi Mining on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Xinjiang Baodi Mining or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.26% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Guangzhou Restaurants Group
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Guangzhou Restaurants |
Xinjiang Baodi and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Guangzhou Restaurants
The main advantage of trading using opposite Xinjiang Baodi and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Guangzhou Restaurants 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 Guangzhou Restaurants will offset losses from the drop in Guangzhou Restaurants' 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 |
| Guangzhou Restaurants vs. New China Life | Guangzhou Restaurants vs. Ming Yang Smart | Guangzhou Restaurants vs. 159681 | Guangzhou Restaurants vs. 159005 |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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