Correlation Between Guangdong Wens and Xinya Electronic
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Xinya Electronic Co, you can compare the effects of market volatilities on Guangdong Wens and Xinya Electronic 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 Guangdong Wens with a short position of Xinya Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Xinya Electronic.
Diversification Opportunities for Guangdong Wens and Xinya Electronic
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Xinya is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Xinya Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinya Electronic and Guangdong Wens 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 Guangdong Wens Foodstuff are associated (or correlated) with Xinya Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinya Electronic has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Xinya Electronic go up and down completely randomly.
Pair Corralation between Guangdong Wens and Xinya Electronic
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Xinya Electronic. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 1.05 times less risky than Xinya Electronic. The stock trades about -0.04 of its potential returns per unit of risk. The Xinya Electronic Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,261 in Xinya Electronic Co on September 25, 2024 and sell it today you would earn a total of 235.00 from holding Xinya Electronic Co or generate 18.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Wens Foodstuff vs. Xinya Electronic Co
Performance |
Timeline |
Guangdong Wens Foodstuff |
Xinya Electronic |
Guangdong Wens and Xinya Electronic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Wens and Xinya Electronic
The main advantage of trading using opposite Guangdong Wens and Xinya Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Xinya Electronic 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 Xinya Electronic will offset losses from the drop in Xinya Electronic's long position.Guangdong Wens vs. Ming Yang Smart | Guangdong Wens vs. 159681 | Guangdong Wens vs. 159005 | Guangdong Wens vs. Loctek Ergonomic Technology |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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