Correlation Between Jiangsu Phoenix and Xinxiang Chemical

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Can any of the company-specific risk be diversified away by investing in both Jiangsu Phoenix and Xinxiang Chemical 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 Jiangsu Phoenix and Xinxiang Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiangsu Phoenix Publishing and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on Jiangsu Phoenix and Xinxiang Chemical 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 Jiangsu Phoenix with a short position of Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Phoenix and Xinxiang Chemical.

Diversification Opportunities for Jiangsu Phoenix and Xinxiang Chemical

JiangsuXinxiangDiversified AwayJiangsuXinxiangDiversified Away100%
0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Jiangsu and Xinxiang is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Phoenix Publishing and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber and Jiangsu Phoenix 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 Jiangsu Phoenix Publishing are associated (or correlated) with Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of Jiangsu Phoenix i.e., Jiangsu Phoenix and Xinxiang Chemical go up and down completely randomly.

Pair Corralation between Jiangsu Phoenix and Xinxiang Chemical

Assuming the 90 days trading horizon Jiangsu Phoenix is expected to generate 4.14 times less return on investment than Xinxiang Chemical. But when comparing it to its historical volatility, Jiangsu Phoenix Publishing is 2.01 times less risky than Xinxiang Chemical. It trades about 0.03 of its potential returns per unit of risk. Xinxiang Chemical Fiber is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  373.00  in Xinxiang Chemical Fiber on October 27, 2024 and sell it today you would earn a total of  40.00  from holding Xinxiang Chemical Fiber or generate 10.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Jiangsu Phoenix Publishing  vs.  Xinxiang Chemical Fiber

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 010203040
JavaScript chart by amCharts 3.21.15601928 000949
       Timeline  
Jiangsu Phoenix Publ 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Phoenix Publishing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jiangsu Phoenix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1010.51111.512
Xinxiang Chemical Fiber 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Xinxiang Chemical Fiber are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xinxiang Chemical sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan44.555.5

Jiangsu Phoenix and Xinxiang Chemical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.06-4.54-3.02-1.50.01.53.054.66.157.7 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15601928 000949
       Returns  

Pair Trading with Jiangsu Phoenix and Xinxiang Chemical

The main advantage of trading using opposite Jiangsu Phoenix and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Phoenix position performs unexpectedly, Xinxiang Chemical 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.
The idea behind Jiangsu Phoenix Publishing and Xinxiang Chemical Fiber 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.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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