Correlation Between Xinjiang Tianrun and Changchun
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By analyzing existing cross correlation between Xinjiang Tianrun Dairy and Changchun UP Optotech, you can compare the effects of market volatilities on Xinjiang Tianrun and Changchun 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 Tianrun with a short position of Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Tianrun and Changchun.
Diversification Opportunities for Xinjiang Tianrun and Changchun
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and Changchun is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Tianrun Dairy and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech and Xinjiang Tianrun 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 Tianrun Dairy are associated (or correlated) with Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Xinjiang Tianrun i.e., Xinjiang Tianrun and Changchun go up and down completely randomly.
Pair Corralation between Xinjiang Tianrun and Changchun
Assuming the 90 days trading horizon Xinjiang Tianrun is expected to generate 1.01 times less return on investment than Changchun. But when comparing it to its historical volatility, Xinjiang Tianrun Dairy is 1.38 times less risky than Changchun. It trades about 0.25 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,670 in Changchun UP Optotech on September 17, 2024 and sell it today you would earn a total of 1,369 from holding Changchun UP Optotech or generate 51.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Xinjiang Tianrun Dairy vs. Changchun UP Optotech
Performance |
Timeline |
Xinjiang Tianrun Dairy |
Changchun UP Optotech |
Xinjiang Tianrun and Changchun Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xinjiang Tianrun and Changchun
The main advantage of trading using opposite Xinjiang Tianrun and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Tianrun position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.Xinjiang Tianrun vs. Ningbo Fangzheng Automobile | Xinjiang Tianrun vs. Songz Automobile Air | Xinjiang Tianrun vs. Anhui Jianghuai Automobile | Xinjiang Tianrun vs. Dongfeng Automobile Co |
Changchun vs. Xinjiang Tianrun Dairy | Changchun vs. Eastroc Beverage Group | Changchun vs. Gan Yuan Foods | Changchun vs. Jiajia Food 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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