Correlation Between Guangdong Jingyi and XCMG Construction
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By analyzing existing cross correlation between Guangdong Jingyi Metal and XCMG Construction Machinery, you can compare the effects of market volatilities on Guangdong Jingyi and XCMG 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 Guangdong Jingyi with a short position of XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and XCMG Construction.
Diversification Opportunities for Guangdong Jingyi and XCMG Construction
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and XCMG is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction and Guangdong Jingyi 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 Guangdong Jingyi Metal are associated (or correlated) with XCMG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCMG Construction has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and XCMG Construction go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and XCMG Construction
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 1.15 times more return on investment than XCMG Construction. However, Guangdong Jingyi is 1.15 times more volatile than XCMG Construction Machinery. It trades about 0.26 of its potential returns per unit of risk. XCMG Construction Machinery is currently generating about 0.09 per unit of risk. If you would invest 506.00 in Guangdong Jingyi Metal on September 23, 2024 and sell it today you would earn a total of 255.00 from holding Guangdong Jingyi Metal or generate 50.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Jingyi Metal vs. XCMG Construction Machinery
Performance |
Timeline |
Guangdong Jingyi Metal |
XCMG Construction |
Guangdong Jingyi and XCMG Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Jingyi and XCMG Construction
The main advantage of trading using opposite Guangdong Jingyi and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, XCMG 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 XCMG Construction will offset losses from the drop in XCMG Construction's long position.Guangdong Jingyi vs. TongFu Microelectronics Co | Guangdong Jingyi vs. Qingdao Foods Co | Guangdong Jingyi vs. Unigroup Guoxin Microelectronics | Guangdong Jingyi vs. Leaguer Shenzhen MicroElectronics |
XCMG Construction vs. Industrial and Commercial | XCMG Construction vs. Agricultural Bank of | XCMG Construction vs. China Construction Bank | XCMG Construction vs. Bank of China |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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