Correlation Between Xiamen Bank and SUNSEA Telecommunicatio
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By analyzing existing cross correlation between Xiamen Bank Co and SUNSEA Telecommunications Co, you can compare the effects of market volatilities on Xiamen Bank and SUNSEA Telecommunicatio 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 Xiamen Bank with a short position of SUNSEA Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Bank and SUNSEA Telecommunicatio.
Diversification Opportunities for Xiamen Bank and SUNSEA Telecommunicatio
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and SUNSEA is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Bank Co and SUNSEA Telecommunications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNSEA Telecommunicatio and Xiamen Bank 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 Xiamen Bank Co are associated (or correlated) with SUNSEA Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNSEA Telecommunicatio has no effect on the direction of Xiamen Bank i.e., Xiamen Bank and SUNSEA Telecommunicatio go up and down completely randomly.
Pair Corralation between Xiamen Bank and SUNSEA Telecommunicatio
Assuming the 90 days trading horizon Xiamen Bank Co is expected to generate 0.25 times more return on investment than SUNSEA Telecommunicatio. However, Xiamen Bank Co is 3.94 times less risky than SUNSEA Telecommunicatio. It trades about 0.13 of its potential returns per unit of risk. SUNSEA Telecommunications Co is currently generating about 0.02 per unit of risk. If you would invest 541.00 in Xiamen Bank Co on September 28, 2024 and sell it today you would earn a total of 22.00 from holding Xiamen Bank Co or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Bank Co vs. SUNSEA Telecommunications Co
Performance |
| Timeline |
| Xiamen Bank |
| SUNSEA Telecommunicatio |
Xiamen Bank and SUNSEA Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Bank and SUNSEA Telecommunicatio
The main advantage of trading using opposite Xiamen Bank and SUNSEA Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Bank position performs unexpectedly, SUNSEA Telecommunicatio 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 SUNSEA Telecommunicatio will offset losses from the drop in SUNSEA Telecommunicatio's long position.| Xiamen Bank vs. Western Mining Co | Xiamen Bank vs. Shengda Mining Co | Xiamen Bank vs. Huaibei Mining Holdings | Xiamen Bank vs. Zijin Mining 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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