Correlation Between Xiamen Bank and Heilongjiang Transport
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By analyzing existing cross correlation between Xiamen Bank Co and Heilongjiang Transport Development, you can compare the effects of market volatilities on Xiamen Bank and Heilongjiang Transport 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 Xiamen Bank with a short position of Heilongjiang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Bank and Heilongjiang Transport.
Diversification Opportunities for Xiamen Bank and Heilongjiang Transport
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiamen and Heilongjiang is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Bank Co and Heilongjiang Transport Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heilongjiang Transport and Xiamen Bank 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 Xiamen Bank Co are associated (or correlated) with Heilongjiang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heilongjiang Transport has no effect on the direction of Xiamen Bank i.e., Xiamen Bank and Heilongjiang Transport go up and down completely randomly.
Pair Corralation between Xiamen Bank and Heilongjiang Transport
Assuming the 90 days trading horizon Xiamen Bank is expected to generate 1.74 times less return on investment than Heilongjiang Transport. But when comparing it to its historical volatility, Xiamen Bank Co is 1.17 times less risky than Heilongjiang Transport. It trades about 0.13 of its potential returns per unit of risk. Heilongjiang Transport Development is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 303.00 in Heilongjiang Transport Development on September 4, 2024 and sell it today you would earn a total of 99.00 from holding Heilongjiang Transport Development or generate 32.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Xiamen Bank Co vs. Heilongjiang Transport Develop
Performance |
Timeline |
Xiamen Bank |
Heilongjiang Transport |
Xiamen Bank and Heilongjiang Transport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xiamen Bank and Heilongjiang Transport
The main advantage of trading using opposite Xiamen Bank and Heilongjiang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Bank position performs unexpectedly, Heilongjiang Transport 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 Heilongjiang Transport will offset losses from the drop in Heilongjiang Transport's long position.Xiamen Bank vs. Industrial and Commercial | Xiamen Bank vs. Agricultural Bank of | Xiamen Bank vs. China Construction Bank | Xiamen Bank vs. Bank of China |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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