Correlation Between Xingguang Agricultural and China Marine
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By analyzing existing cross correlation between Xingguang Agricultural Mach and China Marine Information, you can compare the effects of market volatilities on Xingguang Agricultural and China Marine 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 Xingguang Agricultural with a short position of China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xingguang Agricultural and China Marine.
Diversification Opportunities for Xingguang Agricultural and China Marine
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xingguang and China is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Xingguang Agricultural Mach and China Marine Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Information and Xingguang Agricultural 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 Xingguang Agricultural Mach are associated (or correlated) with China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Information has no effect on the direction of Xingguang Agricultural i.e., Xingguang Agricultural and China Marine go up and down completely randomly.
Pair Corralation between Xingguang Agricultural and China Marine
Assuming the 90 days trading horizon Xingguang Agricultural Mach is expected to under-perform the China Marine. But the stock apears to be less risky and, when comparing its historical volatility, Xingguang Agricultural Mach is 1.04 times less risky than China Marine. The stock trades about -0.29 of its potential returns per unit of risk. The China Marine Information is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 3,003 in China Marine Information on October 24, 2024 and sell it today you would lose (383.00) from holding China Marine Information or give up 12.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xingguang Agricultural Mach vs. China Marine Information
Performance |
| Timeline |
| Xingguang Agricultural |
| China Marine Information |
Xingguang Agricultural and China Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xingguang Agricultural and China Marine
The main advantage of trading using opposite Xingguang Agricultural and China Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xingguang Agricultural position performs unexpectedly, China Marine 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 China Marine will offset losses from the drop in China Marine's long position.The idea behind Xingguang Agricultural Mach and China Marine Information 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.
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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