Correlation Between Xiamen Bank and Inner Mongolia

Can any of the company-specific risk be diversified away by investing in both Xiamen Bank and Inner Mongolia 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 Xiamen Bank and Inner Mongolia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xiamen Bank Co and Inner Mongolia Furui, you can compare the effects of market volatilities on Xiamen Bank and Inner Mongolia 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 Xiamen Bank with a short position of Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Bank and Inner Mongolia.

Diversification Opportunities for Xiamen Bank and Inner Mongolia

0.0

Correlation Coefficient

Xiamen Bank  Inner Mongolia

Pay attention - limited upside

The 3 months correlation between Xiamen and Inner is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Bank Co and Inner Mongolia Furui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Furui and Xiamen Bank 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 Xiamen Bank Co are associated (or correlated) with Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Furui has no effect on the direction of Xiamen Bank i.e., Xiamen Bank and Inner Mongolia go up and down completely randomly.

Pair Corralation between Xiamen Bank and Inner Mongolia

If you would invest  504.00  in Xiamen Bank Co on October 25, 2024 and sell it today you would earn a total of  25.00  from holding Xiamen Bank Co or generate 4.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Xiamen Bank Co  vs.  Inner Mongolia Furui

Xiamen Bank

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xiamen Bank Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Xiamen Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Inner Mongolia Furui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inner Mongolia Furui 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.

Pair Trading with Xiamen Bank and Inner Mongolia

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

The idea behind Xiamen Bank Co and Inner Mongolia Furui 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.