Correlation Between Fuda Alloy and Xiandai Investment
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By analyzing existing cross correlation between Fuda Alloy Materials and Xiandai Investment Co, you can compare the effects of market volatilities on Fuda Alloy and Xiandai Investment 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 Fuda Alloy with a short position of Xiandai Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuda Alloy and Xiandai Investment.
Diversification Opportunities for Fuda Alloy and Xiandai Investment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fuda and Xiandai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fuda Alloy Materials and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment and Fuda Alloy 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 Fuda Alloy Materials are associated (or correlated) with Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of Fuda Alloy i.e., Fuda Alloy and Xiandai Investment go up and down completely randomly.
Pair Corralation between Fuda Alloy and Xiandai Investment
Assuming the 90 days trading horizon Fuda Alloy Materials is expected to generate 1.26 times more return on investment than Xiandai Investment. However, Fuda Alloy is 1.26 times more volatile than Xiandai Investment Co. It trades about 0.22 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about 0.18 per unit of risk. If you would invest 926.00 in Fuda Alloy Materials on August 28, 2024 and sell it today you would earn a total of 415.00 from holding Fuda Alloy Materials or generate 44.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuda Alloy Materials vs. Xiandai Investment Co
Performance |
| Timeline |
| Fuda Alloy Materials |
| Xiandai Investment |
Fuda Alloy and Xiandai Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuda Alloy and Xiandai Investment
The main advantage of trading using opposite Fuda Alloy and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuda Alloy position performs unexpectedly, Xiandai Investment 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 Xiandai Investment will offset losses from the drop in Xiandai Investment's long position.| Fuda Alloy vs. Hangzhou Pinming Software | Fuda Alloy vs. China National Software | Fuda Alloy vs. Contec Medical Systems | Fuda Alloy vs. Shenzhen Glory Medical |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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