Correlation Between Bank of Suzhou and Xilinmen Furniture
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By analyzing existing cross correlation between Bank of Suzhou and Xilinmen Furniture Co, you can compare the effects of market volatilities on Bank of Suzhou and Xilinmen Furniture 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 Bank of Suzhou with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Suzhou and Xilinmen Furniture.
Diversification Opportunities for Bank of Suzhou and Xilinmen Furniture
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Xilinmen is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Suzhou and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture and Bank of Suzhou 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 Bank of Suzhou are associated (or correlated) with Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Bank of Suzhou i.e., Bank of Suzhou and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Bank of Suzhou and Xilinmen Furniture
Assuming the 90 days trading horizon Bank of Suzhou is expected to generate 0.55 times more return on investment than Xilinmen Furniture. However, Bank of Suzhou is 1.81 times less risky than Xilinmen Furniture. It trades about 0.04 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.03 per unit of risk. If you would invest 788.00 in Bank of Suzhou on September 30, 2024 and sell it today you would earn a total of 22.00 from holding Bank of Suzhou or generate 2.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of Suzhou vs. Xilinmen Furniture Co
Performance |
Timeline |
Bank of Suzhou |
Xilinmen Furniture |
Bank of Suzhou and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Suzhou and Xilinmen Furniture
The main advantage of trading using opposite Bank of Suzhou and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Suzhou position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture's long position.Bank of Suzhou vs. BYD Co Ltd | ||
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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