Correlation Between Xinjiang Beixin and Ming Yang

Can any of the company-specific risk be diversified away by investing in both Xinjiang Beixin and Ming Yang at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xinjiang Beixin and Ming Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xinjiang Beixin RoadBridge and Ming Yang Smart, you can compare the effects of market volatilities on Xinjiang Beixin and Ming Yang 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 Beixin with a short position of Ming Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Beixin and Ming Yang.

Diversification Opportunities for Xinjiang Beixin and Ming Yang

0.3

Correlation Coefficient

Xinjiang Beixin  Ming Yang

Weak diversification

The 3 months correlation between Xinjiang and Ming is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Beixin RoadBridge and Ming Yang Smart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Yang Smart and Xinjiang Beixin 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 Beixin RoadBridge are associated (or correlated) with Ming Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Yang Smart has no effect on the direction of Xinjiang Beixin i.e., Xinjiang Beixin and Ming Yang go up and down completely randomly.

Pair Corralation between Xinjiang Beixin and Ming Yang

Assuming the 90 days trading horizon Xinjiang Beixin RoadBridge is expected to generate 1.5 times more return on investment than Ming Yang. However, Xinjiang Beixin is 1.5 times more volatile than Ming Yang Smart. It trades about 0.02 of its potential returns per unit of risk. Ming Yang Smart is currently generating about -0.11 per unit of risk. If you would invest  382.00  in Xinjiang Beixin RoadBridge on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Xinjiang Beixin RoadBridge or generate 0.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Xinjiang Beixin RoadBridge  vs.  Ming Yang Smart

Xinjiang Beixin Road

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xinjiang Beixin RoadBridge are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Xinjiang Beixin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ming Yang Smart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ming Yang Smart has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Xinjiang Beixin and Ming Yang

The main advantage of trading using opposite Xinjiang Beixin and Ming Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Beixin position performs unexpectedly, Ming Yang 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 Ming Yang will offset losses from the drop in Ming Yang's long position.

The idea behind Xinjiang Beixin RoadBridge and Ming Yang Smart 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.