Correlation Between Liaoning Dingjide and Xiamen Goldenhome
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Xiamen Goldenhome Co, you can compare the effects of market volatilities on Liaoning Dingjide and Xiamen Goldenhome 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 Liaoning Dingjide with a short position of Xiamen Goldenhome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Xiamen Goldenhome.
Diversification Opportunities for Liaoning Dingjide and Xiamen Goldenhome
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liaoning and Xiamen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica and Xiamen Goldenhome Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Goldenhome and Liaoning Dingjide 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 Liaoning Dingjide Petrochemical are associated (or correlated) with Xiamen Goldenhome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Goldenhome has no effect on the direction of Liaoning Dingjide i.e., Liaoning Dingjide and Xiamen Goldenhome go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Xiamen Goldenhome
Assuming the 90 days trading horizon Liaoning Dingjide Petrochemical is expected to generate 1.38 times more return on investment than Xiamen Goldenhome. However, Liaoning Dingjide is 1.38 times more volatile than Xiamen Goldenhome Co. It trades about 0.02 of its potential returns per unit of risk. Xiamen Goldenhome Co is currently generating about 0.03 per unit of risk. If you would invest 2,815 in Liaoning Dingjide Petrochemical on October 25, 2024 and sell it today you would earn a total of 46.00 from holding Liaoning Dingjide Petrochemical or generate 1.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Xiamen Goldenhome Co
Performance |
Timeline |
Liaoning Dingjide |
Xiamen Goldenhome |
Liaoning Dingjide and Xiamen Goldenhome Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Liaoning Dingjide and Xiamen Goldenhome
The main advantage of trading using opposite Liaoning Dingjide and Xiamen Goldenhome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide position performs unexpectedly, Xiamen Goldenhome 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 Xiamen Goldenhome will offset losses from the drop in Xiamen Goldenhome's long position.Liaoning Dingjide vs. Zijin Mining Group | Liaoning Dingjide vs. Wanhua Chemical Group | Liaoning Dingjide vs. Baoshan Iron Steel | Liaoning Dingjide vs. Rongsheng Petrochemical Co |
Xiamen Goldenhome vs. PetroChina Co Ltd | Xiamen Goldenhome vs. Gansu Jiu Steel | Xiamen Goldenhome vs. Ming Yang Smart | Xiamen Goldenhome vs. Aba Chemicals Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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