Correlation Between WuXi Xinje and HaiXin Foods
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By analyzing existing cross correlation between WuXi Xinje Electric and HaiXin Foods Co, you can compare the effects of market volatilities on WuXi Xinje and HaiXin Foods 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 WuXi Xinje with a short position of HaiXin Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi Xinje and HaiXin Foods.
Diversification Opportunities for WuXi Xinje and HaiXin Foods
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WuXi and HaiXin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding WuXi Xinje Electric and HaiXin Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HaiXin Foods and WuXi Xinje 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 WuXi Xinje Electric are associated (or correlated) with HaiXin Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HaiXin Foods has no effect on the direction of WuXi Xinje i.e., WuXi Xinje and HaiXin Foods go up and down completely randomly.
Pair Corralation between WuXi Xinje and HaiXin Foods
Assuming the 90 days trading horizon WuXi Xinje Electric is expected to generate 1.02 times more return on investment than HaiXin Foods. However, WuXi Xinje is 1.02 times more volatile than HaiXin Foods Co. It trades about 0.33 of its potential returns per unit of risk. HaiXin Foods Co is currently generating about -0.06 per unit of risk. If you would invest 3,878 in WuXi Xinje Electric on November 7, 2024 and sell it today you would earn a total of 592.00 from holding WuXi Xinje Electric or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WuXi Xinje Electric vs. HaiXin Foods Co
Performance |
| Timeline |
| WuXi Xinje Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| HaiXin Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WuXi Xinje and HaiXin Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi Xinje and HaiXin Foods
The main advantage of trading using opposite WuXi Xinje and HaiXin Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi Xinje position performs unexpectedly, HaiXin Foods 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 HaiXin Foods will offset losses from the drop in HaiXin Foods' long position.The idea behind WuXi Xinje Electric and HaiXin Foods Co 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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