Correlation Between Jiugui Liquor and Xinke Material
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By analyzing existing cross correlation between Jiugui Liquor Co and Xinke Material, you can compare the effects of market volatilities on Jiugui Liquor and Xinke Material 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 Jiugui Liquor with a short position of Xinke Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiugui Liquor and Xinke Material.
Diversification Opportunities for Jiugui Liquor and Xinke Material
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jiugui and Xinke is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Jiugui Liquor Co and Xinke Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinke Material and Jiugui Liquor 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 Jiugui Liquor Co are associated (or correlated) with Xinke Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinke Material has no effect on the direction of Jiugui Liquor i.e., Jiugui Liquor and Xinke Material go up and down completely randomly.
Pair Corralation between Jiugui Liquor and Xinke Material
Assuming the 90 days trading horizon Jiugui Liquor Co is expected to under-perform the Xinke Material. But the stock apears to be less risky and, when comparing its historical volatility, Jiugui Liquor Co is 1.04 times less risky than Xinke Material. The stock trades about -0.06 of its potential returns per unit of risk. The Xinke Material is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 266.00 in Xinke Material on September 26, 2024 and sell it today you would earn a total of 120.00 from holding Xinke Material or generate 45.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Jiugui Liquor Co vs. Xinke Material
Performance |
Timeline |
Jiugui Liquor |
Xinke Material |
Jiugui Liquor and Xinke Material Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiugui Liquor and Xinke Material
The main advantage of trading using opposite Jiugui Liquor and Xinke Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiugui Liquor position performs unexpectedly, Xinke Material 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 Xinke Material will offset losses from the drop in Xinke Material's long position.Jiugui Liquor vs. PetroChina Co Ltd | Jiugui Liquor vs. China Mobile Limited | Jiugui Liquor vs. CNOOC Limited | Jiugui Liquor vs. Ping An Insurance |
Xinke Material vs. Wanhua Chemical Group | Xinke Material vs. Shandong Gold Mining | Xinke Material vs. Rongsheng Petrochemical Co | Xinke Material vs. Inner Mongolia BaoTou |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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