Correlation Between Postal Savings and Xinya Electronic
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By analyzing existing cross correlation between Postal Savings Bank and Xinya Electronic Co, you can compare the effects of market volatilities on Postal Savings and Xinya Electronic 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 Postal Savings with a short position of Xinya Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Xinya Electronic.
Diversification Opportunities for Postal Savings and Xinya Electronic
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Postal and Xinya is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Xinya Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinya Electronic and Postal Savings 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 Postal Savings Bank are associated (or correlated) with Xinya Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinya Electronic has no effect on the direction of Postal Savings i.e., Postal Savings and Xinya Electronic go up and down completely randomly.
Pair Corralation between Postal Savings and Xinya Electronic
Assuming the 90 days trading horizon Postal Savings is expected to generate 79.37 times less return on investment than Xinya Electronic. But when comparing it to its historical volatility, Postal Savings Bank is 4.28 times less risky than Xinya Electronic. It trades about 0.01 of its potential returns per unit of risk. Xinya Electronic Co is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,443 in Xinya Electronic Co on November 7, 2024 and sell it today you would earn a total of 352.00 from holding Xinya Electronic Co or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. Xinya Electronic Co
Performance |
| Timeline |
| Postal Savings Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Xinya Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Postal Savings and Xinya Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Xinya Electronic
The main advantage of trading using opposite Postal Savings and Xinya Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, Xinya Electronic 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 Xinya Electronic will offset losses from the drop in Xinya Electronic's long position.The idea behind Postal Savings Bank and Xinya Electronic 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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