Correlation Between Yunnan Jianzhijia and Xiangyang Automobile
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By analyzing existing cross correlation between Yunnan Jianzhijia Health Chain and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Yunnan Jianzhijia and Xiangyang Automobile 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 Yunnan Jianzhijia with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Jianzhijia and Xiangyang Automobile.
Diversification Opportunities for Yunnan Jianzhijia and Xiangyang Automobile
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yunnan and Xiangyang is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Jianzhijia Health Chain and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Yunnan Jianzhijia 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 Yunnan Jianzhijia Health Chain are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Yunnan Jianzhijia i.e., Yunnan Jianzhijia and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Yunnan Jianzhijia and Xiangyang Automobile
Assuming the 90 days trading horizon Yunnan Jianzhijia Health Chain is expected to under-perform the Xiangyang Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Yunnan Jianzhijia Health Chain is 2.09 times less risky than Xiangyang Automobile. The stock trades about -0.44 of its potential returns per unit of risk. The Xiangyang Automobile Bearing is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 668.00 in Xiangyang Automobile Bearing on October 18, 2024 and sell it today you would lose (39.00) from holding Xiangyang Automobile Bearing or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Jianzhijia Health Chain vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Yunnan Jianzhijia |
| Xiangyang Automobile |
Yunnan Jianzhijia and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Jianzhijia and Xiangyang Automobile
The main advantage of trading using opposite Yunnan Jianzhijia and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Jianzhijia position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.The idea behind Yunnan Jianzhijia Health Chain and Xiangyang Automobile Bearing 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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