Correlation Between Xinyi Solar and Global Ship
Can any of the company-specific risk be diversified away by investing in both Xinyi Solar and Global Ship 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 Xinyi Solar and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinyi Solar Holdings and Global Ship Lease, you can compare the effects of market volatilities on Xinyi Solar and Global Ship 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 Xinyi Solar with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyi Solar and Global Ship.
Diversification Opportunities for Xinyi Solar and Global Ship
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xinyi and Global is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Xinyi Solar Holdings and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and Xinyi Solar 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 Xinyi Solar Holdings are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Xinyi Solar i.e., Xinyi Solar and Global Ship go up and down completely randomly.
Pair Corralation between Xinyi Solar and Global Ship
Assuming the 90 days horizon Xinyi Solar Holdings is expected to under-perform the Global Ship. In addition to that, Xinyi Solar is 2.03 times more volatile than Global Ship Lease. It trades about -0.07 of its total potential returns per unit of risk. Global Ship Lease is currently generating about -0.13 per unit of volatility. If you would invest 2,149 in Global Ship Lease on September 4, 2024 and sell it today you would lose (117.00) from holding Global Ship Lease or give up 5.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinyi Solar Holdings vs. Global Ship Lease
Performance |
| Timeline |
| Xinyi Solar Holdings |
| Global Ship Lease |
Xinyi Solar and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinyi Solar and Global Ship
The main advantage of trading using opposite Xinyi Solar and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyi Solar position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| Xinyi Solar vs. Sqs Software Quality | Xinyi Solar vs. Guidewire Software | Xinyi Solar vs. Magic Software Enterprises | Xinyi Solar vs. Information Services International Dentsu |
| Global Ship vs. Wilh Wilhelmsen Holding | Global Ship vs. Superior Plus Corp | Global Ship vs. NMI Holdings | Global Ship vs. Origin Agritech |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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