Correlation Between Dalian Thermal and Xinya Electronic
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By analyzing existing cross correlation between Dalian Thermal Power and Xinya Electronic Co, you can compare the effects of market volatilities on Dalian Thermal and Xinya Electronic 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 Dalian Thermal with a short position of Xinya Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Xinya Electronic.
Diversification Opportunities for Dalian Thermal and Xinya Electronic
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dalian and Xinya is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Xinya Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinya Electronic and Dalian Thermal 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 Dalian Thermal Power are associated (or correlated) with Xinya Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinya Electronic has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Xinya Electronic go up and down completely randomly.
Pair Corralation between Dalian Thermal and Xinya Electronic
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 1.52 times more return on investment than Xinya Electronic. However, Dalian Thermal is 1.52 times more volatile than Xinya Electronic Co. It trades about 0.11 of its potential returns per unit of risk. Xinya Electronic Co is currently generating about 0.16 per unit of risk. If you would invest 617.00 in Dalian Thermal Power on September 24, 2024 and sell it today you would earn a total of 152.00 from holding Dalian Thermal Power or generate 24.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Dalian Thermal Power vs. Xinya Electronic Co
Performance |
Timeline |
Dalian Thermal Power |
Xinya Electronic |
Dalian Thermal and Xinya Electronic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dalian Thermal and Xinya Electronic
The main advantage of trading using opposite Dalian Thermal and Xinya Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Xinya Electronic 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 Xinya Electronic will offset losses from the drop in Xinya Electronic's long position.Dalian Thermal vs. PetroChina Co Ltd | Dalian Thermal vs. China Mobile Limited | Dalian Thermal vs. CNOOC Limited | Dalian Thermal vs. Ping An Insurance |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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