Correlation Between Masterwork Machinery and Xilinmen Furniture
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By analyzing existing cross correlation between Masterwork Machinery and Xilinmen Furniture Co, you can compare the effects of market volatilities on Masterwork Machinery 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 Masterwork Machinery with a short position of Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masterwork Machinery and Xilinmen Furniture.
Diversification Opportunities for Masterwork Machinery and Xilinmen Furniture
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Masterwork and Xilinmen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Masterwork Machinery and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture and Masterwork Machinery 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 Masterwork Machinery 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 Masterwork Machinery i.e., Masterwork Machinery and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Masterwork Machinery and Xilinmen Furniture
Assuming the 90 days trading horizon Masterwork Machinery is expected to generate 1.93 times more return on investment than Xilinmen Furniture. However, Masterwork Machinery is 1.93 times more volatile than Xilinmen Furniture Co. It trades about 0.07 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about -0.15 per unit of risk. If you would invest 541.00 in Masterwork Machinery on September 25, 2024 and sell it today you would earn a total of 52.00 from holding Masterwork Machinery or generate 9.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Masterwork Machinery vs. Xilinmen Furniture Co
Performance |
Timeline |
Masterwork Machinery |
Xilinmen Furniture |
Masterwork Machinery and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Masterwork Machinery and Xilinmen Furniture
The main advantage of trading using opposite Masterwork Machinery and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masterwork Machinery 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.Masterwork Machinery vs. Jiangsu GDK Biotechnology | Masterwork Machinery vs. Bloomage Biotechnology Corp | Masterwork Machinery vs. Sinomach Automobile Co | Masterwork Machinery vs. Ningbo Ligong Online |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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