Correlation Between Xinxiang Chemical and Suntar Environmental

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Can any of the company-specific risk be diversified away by investing in both Xinxiang Chemical and Suntar Environmental 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 Xinxiang Chemical and Suntar Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinxiang Chemical Fiber and Suntar Environmental Technology, you can compare the effects of market volatilities on Xinxiang Chemical and Suntar Environmental 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 Xinxiang Chemical with a short position of Suntar Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinxiang Chemical and Suntar Environmental.

Diversification Opportunities for Xinxiang Chemical and Suntar Environmental

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Xinxiang and Suntar is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xinxiang Chemical Fiber and Suntar Environmental Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntar Environmental and Xinxiang Chemical 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 Xinxiang Chemical Fiber are associated (or correlated) with Suntar Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntar Environmental has no effect on the direction of Xinxiang Chemical i.e., Xinxiang Chemical and Suntar Environmental go up and down completely randomly.

Pair Corralation between Xinxiang Chemical and Suntar Environmental

Assuming the 90 days trading horizon Xinxiang Chemical Fiber is expected to generate 1.85 times more return on investment than Suntar Environmental. However, Xinxiang Chemical is 1.85 times more volatile than Suntar Environmental Technology. It trades about 0.34 of its potential returns per unit of risk. Suntar Environmental Technology is currently generating about 0.08 per unit of risk. If you would invest  436.00  in Xinxiang Chemical Fiber on August 14, 2025 and sell it today you would earn a total of  99.00  from holding Xinxiang Chemical Fiber or generate 22.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Xinxiang Chemical Fiber  vs.  Suntar Environmental Technolog

 Performance 
       Timeline  
Xinxiang Chemical Fiber 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Xinxiang Chemical Fiber are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xinxiang Chemical sustained solid returns over the last few months and may actually be approaching a breakup point.
Suntar Environmental 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Suntar Environmental Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Suntar Environmental sustained solid returns over the last few months and may actually be approaching a breakup point.

Xinxiang Chemical and Suntar Environmental Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xinxiang Chemical and Suntar Environmental

The main advantage of trading using opposite Xinxiang Chemical and Suntar Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinxiang Chemical position performs unexpectedly, Suntar Environmental 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 Suntar Environmental will offset losses from the drop in Suntar Environmental's long position.
The idea behind Xinxiang Chemical Fiber and Suntar Environmental Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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