Correlation Between Xiamen Goldenhome and Shaanxi Construction
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By analyzing existing cross correlation between Xiamen Goldenhome Co and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Xiamen Goldenhome and Shaanxi Construction 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 Goldenhome with a short position of Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Goldenhome and Shaanxi Construction.
Diversification Opportunities for Xiamen Goldenhome and Shaanxi Construction
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Shaanxi is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Goldenhome Co and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction and Xiamen Goldenhome 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 Goldenhome Co are associated (or correlated) with Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Xiamen Goldenhome i.e., Xiamen Goldenhome and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Xiamen Goldenhome and Shaanxi Construction
Assuming the 90 days trading horizon Xiamen Goldenhome Co is expected to generate 0.64 times more return on investment than Shaanxi Construction. However, Xiamen Goldenhome Co is 1.56 times less risky than Shaanxi Construction. It trades about 0.03 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about 0.01 per unit of risk. If you would invest 1,921 in Xiamen Goldenhome Co on October 25, 2024 and sell it today you would earn a total of 63.00 from holding Xiamen Goldenhome Co or generate 3.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Xiamen Goldenhome Co vs. Shaanxi Construction Machinery
Performance |
Timeline |
Xiamen Goldenhome |
Shaanxi Construction |
Xiamen Goldenhome and Shaanxi Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xiamen Goldenhome and Shaanxi Construction
The main advantage of trading using opposite Xiamen Goldenhome and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Goldenhome position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.Xiamen Goldenhome vs. PetroChina Co Ltd | Xiamen Goldenhome vs. Gansu Jiu Steel | Xiamen Goldenhome vs. Ming Yang Smart | Xiamen Goldenhome vs. Aba Chemicals Corp |
Shaanxi Construction vs. Kweichow Moutai Co | Shaanxi Construction vs. Contemporary Amperex Technology | Shaanxi Construction vs. Beijing Roborock Technology | Shaanxi Construction vs. BYD Co Ltd |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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