Correlation Between Xinhua Winshare and COL Digital

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

Diversification Opportunities for Xinhua Winshare and COL Digital

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Xinhua and COL is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and COL Digital Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Digital Publishing and Xinhua Winshare 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 Xinhua Winshare Publishing are associated (or correlated) with COL Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Digital Publishing has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and COL Digital go up and down completely randomly.

Pair Corralation between Xinhua Winshare and COL Digital

Assuming the 90 days trading horizon Xinhua Winshare is expected to generate 72.05 times less return on investment than COL Digital. But when comparing it to its historical volatility, Xinhua Winshare Publishing is 2.55 times less risky than COL Digital. It trades about 0.0 of its potential returns per unit of risk. COL Digital Publishing is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,614  in COL Digital Publishing on October 18, 2024 and sell it today you would earn a total of  884.00  from holding COL Digital Publishing or generate 54.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Xinhua Winshare Publishing  vs.  COL Digital Publishing

 Performance 
       Timeline  
Xinhua Winshare Publ 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Xinhua Winshare Publishing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Xinhua Winshare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
COL Digital Publishing 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in COL Digital Publishing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, COL Digital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Xinhua Winshare and COL Digital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xinhua Winshare and COL Digital

The main advantage of trading using opposite Xinhua Winshare and COL Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, COL Digital 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 COL Digital will offset losses from the drop in COL Digital's long position.
The idea behind Xinhua Winshare Publishing and COL Digital Publishing 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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