Correlation Between Imeik Technology and Xinjiang Baodi

Can any of the company-specific risk be diversified away by investing in both Imeik Technology and Xinjiang Baodi 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 Imeik Technology and Xinjiang Baodi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Imeik Technology Development and Xinjiang Baodi Mining, you can compare the effects of market volatilities on Imeik Technology and Xinjiang Baodi 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 Imeik Technology with a short position of Xinjiang Baodi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imeik Technology and Xinjiang Baodi.

Diversification Opportunities for Imeik Technology and Xinjiang Baodi

-0.09

Correlation Coefficient

Imeik Technology  Xinjiang Baodi

Good diversification

The 3 months correlation between Imeik and Xinjiang is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Imeik Technology Development and Xinjiang Baodi Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Baodi Mining and Imeik Technology 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 Imeik Technology Development are associated (or correlated) with Xinjiang Baodi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Baodi Mining has no effect on the direction of Imeik Technology i.e., Imeik Technology and Xinjiang Baodi go up and down completely randomly.

Pair Corralation between Imeik Technology and Xinjiang Baodi

Assuming the 90 days trading horizon Imeik Technology Development is expected to under-perform the Xinjiang Baodi. In addition to that, Imeik Technology is 1.03 times more volatile than Xinjiang Baodi Mining. It trades about -0.3 of its total potential returns per unit of risk. Xinjiang Baodi Mining is currently generating about -0.09 per unit of volatility. If you would invest  671.00  in Xinjiang Baodi Mining on October 6, 2024 and sell it today you would lose (36.00) from holding Xinjiang Baodi Mining or give up 5.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Imeik Technology Development  vs.  Xinjiang Baodi Mining

Imeik Technology Dev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imeik Technology Development 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xinjiang Baodi Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xinjiang Baodi Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Xinjiang Baodi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Imeik Technology and Xinjiang Baodi

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

The idea behind Imeik Technology Development and Xinjiang Baodi Mining 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.