Correlation Between Xilinmen Furniture and Sinosteel Luonai
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By analyzing existing cross correlation between Xilinmen Furniture Co and Sinosteel Luonai Materials, you can compare the effects of market volatilities on Xilinmen Furniture and Sinosteel Luonai 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 Sinosteel Luonai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilinmen Furniture and Sinosteel Luonai.
Diversification Opportunities for Xilinmen Furniture and Sinosteel Luonai
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xilinmen and Sinosteel is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Xilinmen Furniture Co and Sinosteel Luonai Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosteel Luonai Mat 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 Sinosteel Luonai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosteel Luonai Mat has no effect on the direction of Xilinmen Furniture i.e., Xilinmen Furniture and Sinosteel Luonai go up and down completely randomly.
Pair Corralation between Xilinmen Furniture and Sinosteel Luonai
Assuming the 90 days trading horizon Xilinmen Furniture Co is expected to generate 1.18 times more return on investment than Sinosteel Luonai. However, Xilinmen Furniture is 1.18 times more volatile than Sinosteel Luonai Materials. It trades about -0.06 of its potential returns per unit of risk. Sinosteel Luonai Materials is currently generating about -0.13 per unit of risk. If you would invest 1,946 in Xilinmen Furniture Co on September 12, 2024 and sell it today you would lose (64.00) from holding Xilinmen Furniture Co or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilinmen Furniture Co vs. Sinosteel Luonai Materials
Performance |
| Timeline |
| Xilinmen Furniture |
| Sinosteel Luonai Mat |
Xilinmen Furniture and Sinosteel Luonai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilinmen Furniture and Sinosteel Luonai
The main advantage of trading using opposite Xilinmen Furniture and Sinosteel Luonai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilinmen Furniture position performs unexpectedly, Sinosteel Luonai 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 Sinosteel Luonai will offset losses from the drop in Sinosteel Luonai'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 |
| Sinosteel Luonai vs. Zijin Mining Group | Sinosteel Luonai vs. Wanhua Chemical Group | Sinosteel Luonai vs. Baoshan Iron Steel | Sinosteel Luonai vs. Rongsheng Petrochemical Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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