Correlation Between Xilinmen Furniture and Tianjin Yiyi
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By analyzing existing cross correlation between Xilinmen Furniture Co and Tianjin Yiyi Hygiene, you can compare the effects of market volatilities on Xilinmen Furniture and Tianjin Yiyi 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 Xilinmen Furniture with a short position of Tianjin Yiyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilinmen Furniture and Tianjin Yiyi.
Diversification Opportunities for Xilinmen Furniture and Tianjin Yiyi
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xilinmen and Tianjin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Xilinmen Furniture Co and Tianjin Yiyi Hygiene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Yiyi Hygiene and Xilinmen Furniture 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 Xilinmen Furniture Co are associated (or correlated) with Tianjin Yiyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Yiyi Hygiene has no effect on the direction of Xilinmen Furniture i.e., Xilinmen Furniture and Tianjin Yiyi go up and down completely randomly.
Pair Corralation between Xilinmen Furniture and Tianjin Yiyi
Assuming the 90 days trading horizon Xilinmen Furniture Co is expected to under-perform the Tianjin Yiyi. But the stock apears to be less risky and, when comparing its historical volatility, Xilinmen Furniture Co is 1.49 times less risky than Tianjin Yiyi. The stock trades about -0.06 of its potential returns per unit of risk. The Tianjin Yiyi Hygiene is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,599 in Tianjin Yiyi Hygiene on September 12, 2024 and sell it today you would earn a total of 194.00 from holding Tianjin Yiyi Hygiene or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilinmen Furniture Co vs. Tianjin Yiyi Hygiene
Performance |
| Timeline |
| Xilinmen Furniture |
| Tianjin Yiyi Hygiene |
Xilinmen Furniture and Tianjin Yiyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilinmen Furniture and Tianjin Yiyi
The main advantage of trading using opposite Xilinmen Furniture and Tianjin Yiyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilinmen Furniture position performs unexpectedly, Tianjin Yiyi 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 Tianjin Yiyi will offset losses from the drop in Tianjin Yiyi's long position.| Xilinmen Furniture vs. Lutian Machinery Co | Xilinmen Furniture vs. PetroChina Co Ltd | Xilinmen Furniture vs. Bank of China | Xilinmen Furniture vs. Gansu Jiu Steel |
| Tianjin Yiyi vs. Nuode Investment Co | Tianjin Yiyi vs. Kunwu Jiuding Investment | Tianjin Yiyi vs. Harvest Fund Management | Tianjin Yiyi vs. Metro Investment Development |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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