Correlation Between Guidewire Software and Xinyi Solar
Can any of the company-specific risk be diversified away by investing in both Guidewire Software and Xinyi Solar 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 Guidewire Software and Xinyi Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidewire Software and Xinyi Solar Holdings, you can compare the effects of market volatilities on Guidewire Software and Xinyi Solar 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 Guidewire Software with a short position of Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidewire Software and Xinyi Solar.
Diversification Opportunities for Guidewire Software and Xinyi Solar
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guidewire and Xinyi is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Guidewire Software and Xinyi Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Solar Holdings and Guidewire Software 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 Guidewire Software are associated (or correlated) with Xinyi Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Solar Holdings has no effect on the direction of Guidewire Software i.e., Guidewire Software and Xinyi Solar go up and down completely randomly.
Pair Corralation between Guidewire Software and Xinyi Solar
Assuming the 90 days trading horizon Guidewire Software is expected to under-perform the Xinyi Solar. But the stock apears to be less risky and, when comparing its historical volatility, Guidewire Software is 1.33 times less risky than Xinyi Solar. The stock trades about -0.13 of its potential returns per unit of risk. The Xinyi Solar Holdings is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Xinyi Solar Holdings on September 12, 2024 and sell it today you would lose (3.00) from holding Xinyi Solar Holdings or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidewire Software vs. Xinyi Solar Holdings
Performance |
| Timeline |
| Guidewire Software |
| Xinyi Solar Holdings |
Guidewire Software and Xinyi Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidewire Software and Xinyi Solar
The main advantage of trading using opposite Guidewire Software and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidewire Software position performs unexpectedly, Xinyi Solar 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 Xinyi Solar will offset losses from the drop in Xinyi Solar's long position.| Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc |
| Xinyi Solar vs. Sunrun Inc | Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. Superior Plus Corp | Xinyi Solar vs. SIVERS SEMICONDUCTORS AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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