Correlation Between Hainan Haiqi and Chengdu Xinzhu
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Chengdu Xinzhu RoadBridge, you can compare the effects of market volatilities on Hainan Haiqi and Chengdu Xinzhu 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 Hainan Haiqi with a short position of Chengdu Xinzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Chengdu Xinzhu.
Diversification Opportunities for Hainan Haiqi and Chengdu Xinzhu
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hainan and Chengdu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and Chengdu Xinzhu RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xinzhu RoadBridge and Hainan Haiqi 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 Hainan Haiqi Transportation are associated (or correlated) with Chengdu Xinzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xinzhu RoadBridge has no effect on the direction of Hainan Haiqi i.e., Hainan Haiqi and Chengdu Xinzhu go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Chengdu Xinzhu
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to under-perform the Chengdu Xinzhu. But the stock apears to be less risky and, when comparing its historical volatility, Hainan Haiqi Transportation is 1.5 times less risky than Chengdu Xinzhu. The stock trades about -0.16 of its potential returns per unit of risk. The Chengdu Xinzhu RoadBridge is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 507.00 in Chengdu Xinzhu RoadBridge on October 11, 2024 and sell it today you would earn a total of 79.00 from holding Chengdu Xinzhu RoadBridge or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Haiqi Transportation vs. Chengdu Xinzhu RoadBridge
Performance |
| Timeline |
| Hainan Haiqi Transpo |
| Chengdu Xinzhu RoadBridge |
Hainan Haiqi and Chengdu Xinzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Chengdu Xinzhu
The main advantage of trading using opposite Hainan Haiqi and Chengdu Xinzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi position performs unexpectedly, Chengdu Xinzhu 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 Chengdu Xinzhu will offset losses from the drop in Chengdu Xinzhu's long position.| Hainan Haiqi vs. Beijing Kingsoft Office | Hainan Haiqi vs. Guangzhou Restaurants Group | Hainan Haiqi vs. Anhui Transport Consulting | Hainan Haiqi vs. Easyhome New Retail |
| Chengdu Xinzhu vs. Inspur Software Co | Chengdu Xinzhu vs. Thunder Software Technology | Chengdu Xinzhu vs. Shanghai Newtouch Software | Chengdu Xinzhu vs. Bingo Software 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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