Correlation Between China Telecom and Xinxiang Chemical
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By analyzing existing cross correlation between China Telecom Corp and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on China Telecom and Xinxiang Chemical 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 China Telecom with a short position of Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Telecom and Xinxiang Chemical.
Diversification Opportunities for China Telecom and Xinxiang Chemical
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Xinxiang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding China Telecom Corp and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber and China Telecom 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 China Telecom Corp are associated (or correlated) with Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of China Telecom i.e., China Telecom and Xinxiang Chemical go up and down completely randomly.
Pair Corralation between China Telecom and Xinxiang Chemical
Assuming the 90 days trading horizon China Telecom is expected to generate 5.78 times less return on investment than Xinxiang Chemical. But when comparing it to its historical volatility, China Telecom Corp is 3.77 times less risky than Xinxiang Chemical. It trades about 0.12 of its potential returns per unit of risk. Xinxiang Chemical Fiber is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Xinxiang Chemical Fiber on September 15, 2024 and sell it today you would earn a total of 76.00 from holding Xinxiang Chemical Fiber or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Telecom Corp vs. Xinxiang Chemical Fiber
Performance |
| Timeline |
| China Telecom Corp |
| Xinxiang Chemical Fiber |
China Telecom and Xinxiang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Telecom and Xinxiang Chemical
The main advantage of trading using opposite China Telecom and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Telecom position performs unexpectedly, Xinxiang Chemical 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.| China Telecom vs. Shandong Publishing Media | China Telecom vs. Peoples Insurance of | China Telecom vs. Southern PublishingMedia Co | China Telecom vs. China Publishing Media |
| Xinxiang Chemical vs. Zijin Mining Group | Xinxiang Chemical vs. Wanhua Chemical Group | Xinxiang Chemical vs. Baoshan Iron Steel | Xinxiang Chemical vs. Shandong Gold Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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