Correlation Between Xinjiang Baodi and Jiangsu Seagull
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Jiangsu Seagull Cooling, you can compare the effects of market volatilities on Xinjiang Baodi and Jiangsu Seagull 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 Jiangsu Seagull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Jiangsu Seagull.
Diversification Opportunities for Xinjiang Baodi and Jiangsu Seagull
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xinjiang and Jiangsu is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Jiangsu Seagull Cooling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Seagull Cooling 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 Jiangsu Seagull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Seagull Cooling has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Jiangsu Seagull go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Jiangsu Seagull
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to generate 0.36 times more return on investment than Jiangsu Seagull. However, Xinjiang Baodi Mining is 2.76 times less risky than Jiangsu Seagull. It trades about -0.18 of its potential returns per unit of risk. Jiangsu Seagull Cooling is currently generating about -0.08 per unit of risk. If you would invest 671.00 in Xinjiang Baodi Mining on November 8, 2024 and sell it today you would lose (48.00) from holding Xinjiang Baodi Mining or give up 7.15% 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. Jiangsu Seagull Cooling
Performance |
| Timeline |
| Xinjiang Baodi Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangsu Seagull Cooling |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Xinjiang Baodi and Jiangsu Seagull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Jiangsu Seagull
The main advantage of trading using opposite Xinjiang Baodi and Jiangsu Seagull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Jiangsu Seagull 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 Jiangsu Seagull will offset losses from the drop in Jiangsu Seagull's long position.The idea behind Xinjiang Baodi Mining and Jiangsu Seagull Cooling 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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