Correlation Between XinJiang GuoTong and Tongyu Communication
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By analyzing existing cross correlation between XinJiang GuoTong Pipeline and Tongyu Communication, you can compare the effects of market volatilities on XinJiang GuoTong and Tongyu Communication 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 XinJiang GuoTong with a short position of Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of XinJiang GuoTong and Tongyu Communication.
Diversification Opportunities for XinJiang GuoTong and Tongyu Communication
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between XinJiang and Tongyu is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding XinJiang GuoTong Pipeline and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication and XinJiang GuoTong 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 XinJiang GuoTong Pipeline are associated (or correlated) with Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of XinJiang GuoTong i.e., XinJiang GuoTong and Tongyu Communication go up and down completely randomly.
Pair Corralation between XinJiang GuoTong and Tongyu Communication
Assuming the 90 days trading horizon XinJiang GuoTong is expected to generate 1.27 times less return on investment than Tongyu Communication. But when comparing it to its historical volatility, XinJiang GuoTong Pipeline is 1.2 times less risky than Tongyu Communication. It trades about 0.2 of its potential returns per unit of risk. Tongyu Communication is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,025 in Tongyu Communication on September 6, 2024 and sell it today you would earn a total of 607.00 from holding Tongyu Communication or generate 59.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
XinJiang GuoTong Pipeline vs. Tongyu Communication
Performance |
Timeline |
XinJiang GuoTong Pipeline |
Tongyu Communication |
XinJiang GuoTong and Tongyu Communication Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with XinJiang GuoTong and Tongyu Communication
The main advantage of trading using opposite XinJiang GuoTong and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XinJiang GuoTong position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.XinJiang GuoTong vs. Agricultural Bank of | XinJiang GuoTong vs. Industrial and Commercial | XinJiang GuoTong vs. Bank of China | XinJiang GuoTong vs. China Construction Bank |
Tongyu Communication vs. Industrial and Commercial | Tongyu Communication vs. China Construction Bank | Tongyu Communication vs. Bank of China | Tongyu Communication vs. Agricultural Bank of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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