Correlation Between Penyao Environmental and Xinxiang Chemical
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By analyzing existing cross correlation between Penyao Environmental Protection and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on Penyao Environmental and Xinxiang 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 Penyao Environmental with a short position of Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penyao Environmental and Xinxiang Chemical.
Diversification Opportunities for Penyao Environmental and Xinxiang Chemical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Penyao and Xinxiang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Penyao Environmental Protectio and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber and Penyao Environmental 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 Penyao Environmental Protection are associated (or correlated) with Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of Penyao Environmental i.e., Penyao Environmental and Xinxiang Chemical go up and down completely randomly.
Pair Corralation between Penyao Environmental and Xinxiang Chemical
Assuming the 90 days trading horizon Penyao Environmental Protection is expected to under-perform the Xinxiang Chemical. In addition to that, Penyao Environmental is 1.23 times more volatile than Xinxiang Chemical Fiber. It trades about -0.03 of its total potential returns per unit of risk. Xinxiang Chemical Fiber is currently generating about 0.0 per unit of volatility. If you would invest 434.00 in Xinxiang Chemical Fiber on September 25, 2024 and sell it today you would lose (8.00) from holding Xinxiang Chemical Fiber or give up 1.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Penyao Environmental Protectio vs. Xinxiang Chemical Fiber
Performance |
Timeline |
Penyao Environmental |
Xinxiang Chemical Fiber |
Penyao Environmental and Xinxiang Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penyao Environmental and Xinxiang Chemical
The main advantage of trading using opposite Penyao Environmental and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penyao Environmental position performs unexpectedly, Xinxiang 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.Penyao Environmental vs. China Sports Industry | Penyao Environmental vs. Sportsoul Co Ltd | Penyao Environmental vs. Chinese Universe Publishing | Penyao Environmental vs. Xinhua Winshare Publishing |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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