Correlation Between Xintec and China Times
Can any of the company-specific risk be diversified away by investing in both Xintec and China Times 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 Xintec and China Times into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xintec and China Times Publishing, you can compare the effects of market volatilities on Xintec and China Times 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 Xintec with a short position of China Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xintec and China Times.
Diversification Opportunities for Xintec and China Times
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xintec and China is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Xintec and China Times Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Times Publishing and Xintec 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 Xintec are associated (or correlated) with China Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Times Publishing has no effect on the direction of Xintec i.e., Xintec and China Times go up and down completely randomly.
Pair Corralation between Xintec and China Times
Assuming the 90 days trading horizon Xintec is expected to generate 0.75 times more return on investment than China Times. However, Xintec is 1.34 times less risky than China Times. It trades about 0.07 of its potential returns per unit of risk. China Times Publishing is currently generating about 0.01 per unit of risk. If you would invest 9,755 in Xintec on September 3, 2024 and sell it today you would earn a total of 9,345 from holding Xintec or generate 95.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xintec vs. China Times Publishing
Performance |
| Timeline |
| Xintec |
| China Times Publishing |
Xintec and China Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xintec and China Times
The main advantage of trading using opposite Xintec and China Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xintec position performs unexpectedly, China Times 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 China Times will offset losses from the drop in China Times' long position.| Xintec vs. GameSparcs Co | Xintec vs. International Games System | Xintec vs. Sunfar Computer Co | Xintec vs. Loop Telecommunication International |
| China Times vs. Fubon MSCI Taiwan | China Times vs. YuantaP shares Taiwan Top | China Times vs. YuantaP shares Taiwan Electronics | China Times vs. YuantaP shares Taiwan Mid Cap |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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