Correlation Between Allied Machinery and Qijing Machinery
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By analyzing existing cross correlation between Allied Machinery Co and Qijing Machinery, you can compare the effects of market volatilities on Allied Machinery and Qijing Machinery 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 Allied Machinery with a short position of Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Qijing Machinery.
Diversification Opportunities for Allied Machinery and Qijing Machinery
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allied and Qijing is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery and Allied Machinery 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 Allied Machinery Co are associated (or correlated) with Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Allied Machinery i.e., Allied Machinery and Qijing Machinery go up and down completely randomly.
Pair Corralation between Allied Machinery and Qijing Machinery
Assuming the 90 days trading horizon Allied Machinery Co is expected to generate 0.99 times more return on investment than Qijing Machinery. However, Allied Machinery Co is 1.01 times less risky than Qijing Machinery. It trades about 0.22 of its potential returns per unit of risk. Qijing Machinery is currently generating about 0.19 per unit of risk. If you would invest 1,196 in Allied Machinery Co on September 12, 2024 and sell it today you would earn a total of 518.00 from holding Allied Machinery Co or generate 43.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Machinery Co vs. Qijing Machinery
Performance |
| Timeline |
| Allied Machinery |
| Qijing Machinery |
Allied Machinery and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and Qijing Machinery
The main advantage of trading using opposite Allied Machinery and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.| Allied Machinery vs. Peoples Insurance of | Allied Machinery vs. Nanxing Furniture Machinery | Allied Machinery vs. Oppein Home Group | Allied Machinery vs. Bus Online Co |
| Qijing Machinery vs. Gansu Jiu Steel | Qijing Machinery vs. Shandong Mining Machinery | Qijing Machinery vs. Aba Chemicals Corp | Qijing Machinery vs. BlueFocus Communication Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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