Correlation Between China XD and Amerityre Corp
Can any of the company-specific risk be diversified away by investing in both China XD and Amerityre Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China XD and Amerityre Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China XD Plastics and Amerityre Corp, you can compare the effects of market volatilities on China XD and Amerityre Corp 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 China XD with a short position of Amerityre Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of China XD and Amerityre Corp.
Diversification Opportunities for China XD and Amerityre Corp
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Amerityre is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding China XD Plastics and Amerityre Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerityre Corp and China XD 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 China XD Plastics are associated (or correlated) with Amerityre Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amerityre Corp has no effect on the direction of China XD i.e., China XD and Amerityre Corp go up and down completely randomly.
Pair Corralation between China XD and Amerityre Corp
If you would invest 4.00 in Amerityre Corp on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Amerityre Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China XD Plastics vs. Amerityre Corp
Performance |
| Timeline |
| China XD Plastics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Amerityre Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China XD and Amerityre Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China XD and Amerityre Corp
The main advantage of trading using opposite China XD and Amerityre Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China XD position performs unexpectedly, Amerityre Corp 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 Amerityre Corp will offset losses from the drop in Amerityre Corp's long position.| China XD vs. Zhihu Inc ADR | China XD vs. Grupo Televisa SAB | China XD vs. ServiceNow | China XD vs. Getty Images Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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