Correlation Between JuneYao Dairy and Xinjiang Communications
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By analyzing existing cross correlation between JuneYao Dairy Co and Xinjiang Communications Construction, you can compare the effects of market volatilities on JuneYao Dairy and Xinjiang Communications 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 JuneYao Dairy with a short position of Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of JuneYao Dairy and Xinjiang Communications.
Diversification Opportunities for JuneYao Dairy and Xinjiang Communications
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JuneYao and Xinjiang is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding JuneYao Dairy Co and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications and JuneYao Dairy 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 JuneYao Dairy Co are associated (or correlated) with Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of JuneYao Dairy i.e., JuneYao Dairy and Xinjiang Communications go up and down completely randomly.
Pair Corralation between JuneYao Dairy and Xinjiang Communications
Assuming the 90 days trading horizon JuneYao Dairy Co is expected to under-perform the Xinjiang Communications. In addition to that, JuneYao Dairy is 1.28 times more volatile than Xinjiang Communications Construction. It trades about -0.02 of its total potential returns per unit of risk. Xinjiang Communications Construction is currently generating about 0.01 per unit of volatility. If you would invest 1,100 in Xinjiang Communications Construction on November 8, 2024 and sell it today you would earn a total of 9.00 from holding Xinjiang Communications Construction or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JuneYao Dairy Co vs. Xinjiang Communications Constr
Performance |
| Timeline |
| JuneYao Dairy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Xinjiang Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JuneYao Dairy and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JuneYao Dairy and Xinjiang Communications
The main advantage of trading using opposite JuneYao Dairy and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JuneYao Dairy position performs unexpectedly, Xinjiang Communications 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 Xinjiang Communications will offset losses from the drop in Xinjiang Communications' long position.The idea behind JuneYao Dairy Co and Xinjiang Communications Construction 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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