Correlation Between Der International and Xinjiang Communications
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By analyzing existing cross correlation between Der International Home and Xinjiang Communications Construction, you can compare the effects of market volatilities on Der International 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 Der International with a short position of Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Der International and Xinjiang Communications.
Diversification Opportunities for Der International and Xinjiang Communications
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Der and Xinjiang is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Der International Home and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications and Der International 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 Der International Home 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 Der International i.e., Der International and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Der International and Xinjiang Communications
Assuming the 90 days trading horizon Der International Home is expected to generate 1.11 times more return on investment than Xinjiang Communications. However, Der International is 1.11 times more volatile than Xinjiang Communications Construction. It trades about 0.09 of its potential returns per unit of risk. Xinjiang Communications Construction is currently generating about 0.07 per unit of risk. If you would invest 360.00 in Der International Home on September 25, 2024 and sell it today you would earn a total of 140.00 from holding Der International Home or generate 38.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Der International Home vs. Xinjiang Communications Constr
Performance |
Timeline |
Der International Home |
Xinjiang Communications |
Der International and Xinjiang Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Der International and Xinjiang Communications
The main advantage of trading using opposite Der International and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Der International 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.Der International vs. Xinjiang Communications Construction | Der International vs. Jiangsu Yanghe Brewery | Der International vs. Guangzhou Zhujiang Brewery | Der International vs. Tsingtao Brewery Co |
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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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