Correlation Between Xiamen Bank and Guangzhou Tinci
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By analyzing existing cross correlation between Xiamen Bank Co and Guangzhou Tinci Materials, you can compare the effects of market volatilities on Xiamen Bank and Guangzhou Tinci 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 Guangzhou Tinci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Bank and Guangzhou Tinci.
Diversification Opportunities for Xiamen Bank and Guangzhou Tinci
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Guangzhou is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Bank Co and Guangzhou Tinci Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Tinci Materials 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 Guangzhou Tinci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Tinci Materials has no effect on the direction of Xiamen Bank i.e., Xiamen Bank and Guangzhou Tinci go up and down completely randomly.
Pair Corralation between Xiamen Bank and Guangzhou Tinci
Assuming the 90 days trading horizon Xiamen Bank Co is expected to generate 0.44 times more return on investment than Guangzhou Tinci. However, Xiamen Bank Co is 2.29 times less risky than Guangzhou Tinci. It trades about 0.02 of its potential returns per unit of risk. Guangzhou Tinci Materials is currently generating about -0.03 per unit of risk. If you would invest 519.00 in Xiamen Bank Co on September 3, 2024 and sell it today you would earn a total of 37.00 from holding Xiamen Bank Co or generate 7.13% 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. Guangzhou Tinci Materials
Performance |
| Timeline |
| Xiamen Bank |
| Guangzhou Tinci Materials |
Xiamen Bank and Guangzhou Tinci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Bank and Guangzhou Tinci
The main advantage of trading using opposite Xiamen Bank and Guangzhou Tinci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Bank position performs unexpectedly, Guangzhou Tinci 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 Tinci will offset losses from the drop in Guangzhou Tinci's long position.| Xiamen Bank vs. Heilongjiang Transport Development | Xiamen Bank vs. Zhejiang Yayi Metal | Xiamen Bank vs. Rising Nonferrous Metals | Xiamen Bank vs. Guangdong Jingyi Metal |
| Guangzhou Tinci vs. Zijin Mining Group | Guangzhou Tinci vs. Baoshan Iron Steel | Guangzhou Tinci vs. Hoshine Silicon Ind |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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