Correlation Between XinJiang GuoTong and Lianhe Chemical
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By analyzing existing cross correlation between XinJiang GuoTong Pipeline and Lianhe Chemical Technology, you can compare the effects of market volatilities on XinJiang GuoTong and Lianhe 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 XinJiang GuoTong with a short position of Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of XinJiang GuoTong and Lianhe Chemical.
Diversification Opportunities for XinJiang GuoTong and Lianhe Chemical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XinJiang and Lianhe is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding XinJiang GuoTong Pipeline and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech and XinJiang GuoTong 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 XinJiang GuoTong Pipeline are associated (or correlated) with Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of XinJiang GuoTong i.e., XinJiang GuoTong and Lianhe Chemical go up and down completely randomly.
Pair Corralation between XinJiang GuoTong and Lianhe Chemical
Assuming the 90 days trading horizon XinJiang GuoTong Pipeline is expected to generate 1.33 times more return on investment than Lianhe Chemical. However, XinJiang GuoTong is 1.33 times more volatile than Lianhe Chemical Technology. It trades about 0.2 of its potential returns per unit of risk. Lianhe Chemical Technology is currently generating about 0.14 per unit of risk. If you would invest 676.00 in XinJiang GuoTong Pipeline on September 23, 2024 and sell it today you would earn a total of 374.00 from holding XinJiang GuoTong Pipeline or generate 55.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
XinJiang GuoTong Pipeline vs. Lianhe Chemical Technology
Performance |
Timeline |
XinJiang GuoTong Pipeline |
Lianhe Chemical Tech |
XinJiang GuoTong and Lianhe Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with XinJiang GuoTong and Lianhe Chemical
The main advantage of trading using opposite XinJiang GuoTong and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XinJiang GuoTong position performs unexpectedly, Lianhe 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.XinJiang GuoTong vs. Kweichow Moutai Co | XinJiang GuoTong vs. Contemporary Amperex Technology | XinJiang GuoTong vs. G bits Network Technology | XinJiang GuoTong vs. BYD Co Ltd |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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