Correlation Between Zhongtong Guomai and XinJiang GuoTong
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By analyzing existing cross correlation between Zhongtong Guomai Communication and XinJiang GuoTong Pipeline, you can compare the effects of market volatilities on Zhongtong Guomai and XinJiang GuoTong 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 Zhongtong Guomai with a short position of XinJiang GuoTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and XinJiang GuoTong.
Diversification Opportunities for Zhongtong Guomai and XinJiang GuoTong
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongtong and XinJiang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and XinJiang GuoTong Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XinJiang GuoTong Pipeline and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with XinJiang GuoTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XinJiang GuoTong Pipeline has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and XinJiang GuoTong go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and XinJiang GuoTong
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to under-perform the XinJiang GuoTong. In addition to that, Zhongtong Guomai is 1.53 times more volatile than XinJiang GuoTong Pipeline. It trades about -0.2 of its total potential returns per unit of risk. XinJiang GuoTong Pipeline is currently generating about 0.07 per unit of volatility. If you would invest 910.00 in XinJiang GuoTong Pipeline on September 9, 2024 and sell it today you would earn a total of 29.00 from holding XinJiang GuoTong Pipeline or generate 3.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zhongtong Guomai Communication vs. XinJiang GuoTong Pipeline
Performance |
Timeline |
Zhongtong Guomai Com |
XinJiang GuoTong Pipeline |
Zhongtong Guomai and XinJiang GuoTong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhongtong Guomai and XinJiang GuoTong
The main advantage of trading using opposite Zhongtong Guomai and XinJiang GuoTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, XinJiang GuoTong 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 GuoTong will offset losses from the drop in XinJiang GuoTong's long position.Zhongtong Guomai vs. Yangmei Chemical Co | Zhongtong Guomai vs. Liaoning Chengda Biotechnology | Zhongtong Guomai vs. Jiangsu GDK Biotechnology | Zhongtong Guomai vs. Jilin Chemical Fibre |
XinJiang GuoTong vs. Chengdu Xingrong Investment | XinJiang GuoTong vs. Jiangsu Yueda Investment | XinJiang GuoTong vs. Dhc Software Co | XinJiang GuoTong vs. Olympic Circuit Technology |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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