Correlation Between Jinhui Mining and Xinxiang Chemical
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By analyzing existing cross correlation between Jinhui Mining Co and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on Jinhui Mining and Xinxiang Chemical 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 Jinhui Mining with a short position of Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhui Mining and Xinxiang Chemical.
Diversification Opportunities for Jinhui Mining and Xinxiang Chemical
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jinhui and Xinxiang is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jinhui Mining Co and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber and Jinhui Mining 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 Jinhui Mining Co are associated (or correlated) with Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of Jinhui Mining i.e., Jinhui Mining and Xinxiang Chemical go up and down completely randomly.
Pair Corralation between Jinhui Mining and Xinxiang Chemical
Assuming the 90 days trading horizon Jinhui Mining is expected to generate 11.72 times less return on investment than Xinxiang Chemical. But when comparing it to its historical volatility, Jinhui Mining Co is 1.29 times less risky than Xinxiang Chemical. It trades about 0.04 of its potential returns per unit of risk. Xinxiang Chemical Fiber is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 377.00 in Xinxiang Chemical Fiber on November 7, 2024 and sell it today you would earn a total of 33.00 from holding Xinxiang Chemical Fiber or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhui Mining Co vs. Xinxiang Chemical Fiber
Performance |
| Timeline |
| Jinhui Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xinxiang Chemical Fiber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Jinhui Mining and Xinxiang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhui Mining and Xinxiang Chemical
The main advantage of trading using opposite Jinhui Mining and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhui Mining position performs unexpectedly, Xinxiang Chemical 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.The idea behind Jinhui Mining Co and Xinxiang Chemical Fiber pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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