Correlation Between Xilinmen Furniture and Shanghai Metersbonwe
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By analyzing existing cross correlation between Xilinmen Furniture Co and Shanghai Metersbonwe FashionAccessories, you can compare the effects of market volatilities on Xilinmen Furniture and Shanghai Metersbonwe 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 Shanghai Metersbonwe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilinmen Furniture and Shanghai Metersbonwe.
Diversification Opportunities for Xilinmen Furniture and Shanghai Metersbonwe
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xilinmen and Shanghai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Xilinmen Furniture Co and Shanghai Metersbonwe FashionAc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Metersbonwe 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 Shanghai Metersbonwe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Metersbonwe has no effect on the direction of Xilinmen Furniture i.e., Xilinmen Furniture and Shanghai Metersbonwe go up and down completely randomly.
Pair Corralation between Xilinmen Furniture and Shanghai Metersbonwe
Assuming the 90 days trading horizon Xilinmen Furniture Co is expected to under-perform the Shanghai Metersbonwe. But the stock apears to be less risky and, when comparing its historical volatility, Xilinmen Furniture Co is 1.81 times less risky than Shanghai Metersbonwe. The stock trades about -0.05 of its potential returns per unit of risk. The Shanghai Metersbonwe FashionAccessories is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 186.00 in Shanghai Metersbonwe FashionAccessories on September 5, 2024 and sell it today you would earn a total of 58.00 from holding Shanghai Metersbonwe FashionAccessories or generate 31.18% 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. Shanghai Metersbonwe FashionAc
Performance |
| Timeline |
| Xilinmen Furniture |
| Shanghai Metersbonwe |
Xilinmen Furniture and Shanghai Metersbonwe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilinmen Furniture and Shanghai Metersbonwe
The main advantage of trading using opposite Xilinmen Furniture and Shanghai Metersbonwe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilinmen Furniture position performs unexpectedly, Shanghai Metersbonwe 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 Shanghai Metersbonwe will offset losses from the drop in Shanghai Metersbonwe's long position.| Xilinmen Furniture vs. Agricultural Bank of | Xilinmen Furniture vs. Guilin Seamild Foods | Xilinmen Furniture vs. Jiamei Food Packaging | Xilinmen Furniture vs. Postal Savings Bank |
| Shanghai Metersbonwe vs. Shaanxi Beiyuan Chemical | Shanghai Metersbonwe vs. Yangmei Chemical Co | Shanghai Metersbonwe vs. Xiangyu Medical Co | Shanghai Metersbonwe vs. Guangzhou Jointas Chemical |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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