Correlation Between Xinhua Winshare and Vats Liquor
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By analyzing existing cross correlation between Xinhua Winshare Publishing and Vats Liquor Chain, you can compare the effects of market volatilities on Xinhua Winshare and Vats Liquor 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 Vats Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Vats Liquor.
Diversification Opportunities for Xinhua Winshare and Vats Liquor
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xinhua and Vats is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Vats Liquor Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vats Liquor Chain 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 Vats Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vats Liquor Chain has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Vats Liquor go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Vats Liquor
Assuming the 90 days trading horizon Xinhua Winshare Publishing is expected to generate 0.84 times more return on investment than Vats Liquor. However, Xinhua Winshare Publishing is 1.2 times less risky than Vats Liquor. It trades about 0.04 of its potential returns per unit of risk. Vats Liquor Chain is currently generating about -0.03 per unit of risk. If you would invest 1,047 in Xinhua Winshare Publishing on November 9, 2024 and sell it today you would earn a total of 404.00 from holding Xinhua Winshare Publishing or generate 38.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. Vats Liquor Chain
Performance |
| Timeline |
| Xinhua Winshare Publ |
Risk-Adjusted Performance
Weak
Weak | Strong |
| Vats Liquor Chain |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Xinhua Winshare and Vats Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Vats Liquor
The main advantage of trading using opposite Xinhua Winshare and Vats Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Vats Liquor 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 Vats Liquor will offset losses from the drop in Vats Liquor's long position.The idea behind Xinhua Winshare Publishing and Vats Liquor Chain 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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