Correlation Between Shaanxi Beiyuan and Wintao Communications
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By analyzing existing cross correlation between Shaanxi Beiyuan Chemical and Wintao Communications Co, you can compare the effects of market volatilities on Shaanxi Beiyuan and Wintao Communications 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 Shaanxi Beiyuan with a short position of Wintao Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Beiyuan and Wintao Communications.
Diversification Opportunities for Shaanxi Beiyuan and Wintao Communications
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shaanxi and Wintao is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Beiyuan Chemical and Wintao Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintao Communications and Shaanxi Beiyuan 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 Shaanxi Beiyuan Chemical are associated (or correlated) with Wintao Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintao Communications has no effect on the direction of Shaanxi Beiyuan i.e., Shaanxi Beiyuan and Wintao Communications go up and down completely randomly.
Pair Corralation between Shaanxi Beiyuan and Wintao Communications
Assuming the 90 days trading horizon Shaanxi Beiyuan is expected to generate 2.49 times less return on investment than Wintao Communications. But when comparing it to its historical volatility, Shaanxi Beiyuan Chemical is 2.09 times less risky than Wintao Communications. It trades about 0.21 of its potential returns per unit of risk. Wintao Communications Co is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,216 in Wintao Communications Co on September 5, 2024 and sell it today you would earn a total of 360.00 from holding Wintao Communications Co or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shaanxi Beiyuan Chemical vs. Wintao Communications Co
Performance |
| Timeline |
| Shaanxi Beiyuan Chemical |
| Wintao Communications |
Shaanxi Beiyuan and Wintao Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Beiyuan and Wintao Communications
The main advantage of trading using opposite Shaanxi Beiyuan and Wintao Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Beiyuan position performs unexpectedly, Wintao Communications 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 Wintao Communications will offset losses from the drop in Wintao Communications' long position.The idea behind Shaanxi Beiyuan Chemical and Wintao Communications Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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