Correlation Between 37 Interactive and XCMG Construction
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By analyzing existing cross correlation between 37 Interactive Entertainment and XCMG Construction Machinery, you can compare the effects of market volatilities on 37 Interactive 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 37 Interactive with a short position of XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of 37 Interactive and XCMG Construction.
Diversification Opportunities for 37 Interactive and XCMG Construction
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 002555 and XCMG is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding 37 Interactive Entertainment and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction and 37 Interactive 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 37 Interactive Entertainment 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 37 Interactive i.e., 37 Interactive and XCMG Construction go up and down completely randomly.
Pair Corralation between 37 Interactive and XCMG Construction
Assuming the 90 days trading horizon 37 Interactive Entertainment is expected to generate 1.44 times more return on investment than XCMG Construction. However, 37 Interactive is 1.44 times more volatile than XCMG Construction Machinery. It trades about 0.12 of its potential returns per unit of risk. XCMG Construction Machinery is currently generating about 0.07 per unit of risk. If you would invest 1,368 in 37 Interactive Entertainment on September 24, 2024 and sell it today you would earn a total of 302.00 from holding 37 Interactive Entertainment or generate 22.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
37 Interactive Entertainment vs. XCMG Construction Machinery
Performance |
Timeline |
37 Interactive Enter |
XCMG Construction |
37 Interactive and XCMG Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 37 Interactive and XCMG Construction
The main advantage of trading using opposite 37 Interactive and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 37 Interactive 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.37 Interactive vs. Hainan Airlines Co | 37 Interactive vs. Kontour Medical Technology | 37 Interactive vs. Anhui Deli Household | 37 Interactive vs. Xian International Medical |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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