Correlation Between Xizi Clean and Chongqing Brewery
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By analyzing existing cross correlation between Xizi Clean Energy and Chongqing Brewery Co, you can compare the effects of market volatilities on Xizi Clean and Chongqing Brewery 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 Xizi Clean with a short position of Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xizi Clean and Chongqing Brewery.
Diversification Opportunities for Xizi Clean and Chongqing Brewery
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xizi and Chongqing is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Xizi Clean Energy and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery and Xizi Clean 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 Xizi Clean Energy are associated (or correlated) with Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Xizi Clean i.e., Xizi Clean and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Xizi Clean and Chongqing Brewery
Assuming the 90 days trading horizon Xizi Clean Energy is expected to generate 0.98 times more return on investment than Chongqing Brewery. However, Xizi Clean Energy is 1.02 times less risky than Chongqing Brewery. It trades about 0.15 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about 0.13 per unit of risk. If you would invest 940.00 in Xizi Clean Energy on September 12, 2024 and sell it today you would earn a total of 242.00 from holding Xizi Clean Energy or generate 25.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Xizi Clean Energy vs. Chongqing Brewery Co
Performance |
Timeline |
Xizi Clean Energy |
Chongqing Brewery |
Xizi Clean and Chongqing Brewery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xizi Clean and Chongqing Brewery
The main advantage of trading using opposite Xizi Clean and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xizi Clean position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.Xizi Clean vs. Agricultural Bank of | Xizi Clean vs. Industrial and Commercial | Xizi Clean vs. Bank of China | Xizi Clean vs. PetroChina Co Ltd |
Chongqing Brewery vs. China Petroleum Chemical | Chongqing Brewery vs. PetroChina Co Ltd | Chongqing Brewery vs. China State Construction | Chongqing Brewery vs. China Railway Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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