Correlation Between Xilinmen Furniture and Hengli Industrial
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By analyzing existing cross correlation between Xilinmen Furniture Co and Hengli Industrial Development, you can compare the effects of market volatilities on Xilinmen Furniture and Hengli Industrial 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 Xilinmen Furniture with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilinmen Furniture and Hengli Industrial.
Diversification Opportunities for Xilinmen Furniture and Hengli Industrial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xilinmen and Hengli is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Xilinmen Furniture Co and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Xilinmen Furniture 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 Xilinmen Furniture Co are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Xilinmen Furniture i.e., Xilinmen Furniture and Hengli Industrial go up and down completely randomly.
Pair Corralation between Xilinmen Furniture and Hengli Industrial
Assuming the 90 days trading horizon Xilinmen Furniture Co is expected to generate 0.65 times more return on investment than Hengli Industrial. However, Xilinmen Furniture Co is 1.54 times less risky than Hengli Industrial. It trades about -0.01 of its potential returns per unit of risk. Hengli Industrial Development is currently generating about -0.05 per unit of risk. If you would invest 2,095 in Xilinmen Furniture Co on September 26, 2024 and sell it today you would lose (341.00) from holding Xilinmen Furniture Co or give up 16.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xilinmen Furniture Co vs. Hengli Industrial Development
Performance |
Timeline |
Xilinmen Furniture |
Hengli Industrial |
Xilinmen Furniture and Hengli Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xilinmen Furniture and Hengli Industrial
The main advantage of trading using opposite Xilinmen Furniture and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilinmen Furniture position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.Xilinmen Furniture vs. Agricultural Bank of | Xilinmen Furniture vs. Industrial and Commercial | Xilinmen Furniture vs. Bank of China | Xilinmen Furniture vs. China Construction Bank |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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