Correlation Between Xingguang Agricultural and Kunshan Guoli
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By analyzing existing cross correlation between Xingguang Agricultural Mach and Kunshan Guoli Electronic, you can compare the effects of market volatilities on Xingguang Agricultural and Kunshan Guoli 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 Kunshan Guoli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xingguang Agricultural and Kunshan Guoli.
Diversification Opportunities for Xingguang Agricultural and Kunshan Guoli
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xingguang and Kunshan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Xingguang Agricultural Mach and Kunshan Guoli Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunshan Guoli Electronic 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 Kunshan Guoli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunshan Guoli Electronic has no effect on the direction of Xingguang Agricultural i.e., Xingguang Agricultural and Kunshan Guoli go up and down completely randomly.
Pair Corralation between Xingguang Agricultural and Kunshan Guoli
Assuming the 90 days trading horizon Xingguang Agricultural Mach is expected to generate 0.53 times more return on investment than Kunshan Guoli. However, Xingguang Agricultural Mach is 1.9 times less risky than Kunshan Guoli. It trades about 0.18 of its potential returns per unit of risk. Kunshan Guoli Electronic is currently generating about 0.04 per unit of risk. If you would invest 844.00 in Xingguang Agricultural Mach on September 2, 2024 and sell it today you would earn a total of 70.00 from holding Xingguang Agricultural Mach or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xingguang Agricultural Mach vs. Kunshan Guoli Electronic
Performance |
| Timeline |
| Xingguang Agricultural |
| Kunshan Guoli Electronic |
Xingguang Agricultural and Kunshan Guoli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xingguang Agricultural and Kunshan Guoli
The main advantage of trading using opposite Xingguang Agricultural and Kunshan Guoli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xingguang Agricultural position performs unexpectedly, Kunshan Guoli 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 Kunshan Guoli will offset losses from the drop in Kunshan Guoli's long position.The idea behind Xingguang Agricultural Mach and Kunshan Guoli Electronic 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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