Correlation Between Xingguang Agricultural and Anji Foodstuff
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By analyzing existing cross correlation between Xingguang Agricultural Mach and Anji Foodstuff Co, you can compare the effects of market volatilities on Xingguang Agricultural and Anji Foodstuff 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 Anji Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xingguang Agricultural and Anji Foodstuff.
Diversification Opportunities for Xingguang Agricultural and Anji Foodstuff
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xingguang and Anji is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Xingguang Agricultural Mach and Anji Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anji Foodstuff 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 Anji Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anji Foodstuff has no effect on the direction of Xingguang Agricultural i.e., Xingguang Agricultural and Anji Foodstuff go up and down completely randomly.
Pair Corralation between Xingguang Agricultural and Anji Foodstuff
Assuming the 90 days trading horizon Xingguang Agricultural Mach is expected to generate 1.34 times more return on investment than Anji Foodstuff. However, Xingguang Agricultural is 1.34 times more volatile than Anji Foodstuff Co. It trades about 0.01 of its potential returns per unit of risk. Anji Foodstuff Co is currently generating about 0.01 per unit of risk. If you would invest 1,089 in Xingguang Agricultural Mach on September 12, 2024 and sell it today you would lose (62.00) from holding Xingguang Agricultural Mach or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xingguang Agricultural Mach vs. Anji Foodstuff Co
Performance |
| Timeline |
| Xingguang Agricultural |
| Anji Foodstuff |
Xingguang Agricultural and Anji Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xingguang Agricultural and Anji Foodstuff
The main advantage of trading using opposite Xingguang Agricultural and Anji Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xingguang Agricultural position performs unexpectedly, Anji Foodstuff 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 Anji Foodstuff will offset losses from the drop in Anji Foodstuff's long position.The idea behind Xingguang Agricultural Mach and Anji Foodstuff 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.
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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