Correlation Between SOGECLAIR and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both SOGECLAIR and Xinhua Winshare 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 SOGECLAIR and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOGECLAIR SA INH and Xinhua Winshare Publishing, you can compare the effects of market volatilities on SOGECLAIR and Xinhua Winshare 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 SOGECLAIR with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and Xinhua Winshare.
Diversification Opportunities for SOGECLAIR and Xinhua Winshare
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOGECLAIR and Xinhua is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and SOGECLAIR 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 SOGECLAIR SA INH are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of SOGECLAIR i.e., SOGECLAIR and Xinhua Winshare go up and down completely randomly.
Pair Corralation between SOGECLAIR and Xinhua Winshare
Assuming the 90 days horizon SOGECLAIR SA INH is expected to under-perform the Xinhua Winshare. But the stock apears to be less risky and, when comparing its historical volatility, SOGECLAIR SA INH is 1.67 times less risky than Xinhua Winshare. The stock trades about -0.01 of its potential returns per unit of risk. The Xinhua Winshare Publishing is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Xinhua Winshare Publishing on November 7, 2024 and sell it today you would earn a total of 83.00 from holding Xinhua Winshare Publishing or generate 169.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOGECLAIR SA INH vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| SOGECLAIR SA INH |
| Xinhua Winshare Publ |
SOGECLAIR and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOGECLAIR and Xinhua Winshare
The main advantage of trading using opposite SOGECLAIR and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| SOGECLAIR vs. TreeHouse Foods | SOGECLAIR vs. GWILLI FOOD | SOGECLAIR vs. Nomad Foods | SOGECLAIR vs. Siamgas And Petrochemicals |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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