Correlation Between China Times and Xintec
Can any of the company-specific risk be diversified away by investing in both China Times and Xintec 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 China Times and Xintec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Times Publishing and Xintec, you can compare the effects of market volatilities on China Times and Xintec 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 China Times with a short position of Xintec. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Times and Xintec.
Diversification Opportunities for China Times and Xintec
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Xintec is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding China Times Publishing and Xintec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintec and China Times 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 China Times Publishing are associated (or correlated) with Xintec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xintec has no effect on the direction of China Times i.e., China Times and Xintec go up and down completely randomly.
Pair Corralation between China Times and Xintec
Assuming the 90 days trading horizon China Times is expected to generate 13.47 times less return on investment than Xintec. In addition to that, China Times is 1.08 times more volatile than Xintec. It trades about 0.01 of its total potential returns per unit of risk. Xintec is currently generating about 0.1 per unit of volatility. If you would invest 12,706 in Xintec on September 3, 2024 and sell it today you would earn a total of 6,394 from holding Xintec or generate 50.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Times Publishing vs. Xintec
Performance |
| Timeline |
| China Times Publishing |
| Xintec |
China Times and Xintec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Times and Xintec
The main advantage of trading using opposite China Times and Xintec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Times position performs unexpectedly, Xintec 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 Xintec will offset losses from the drop in Xintec's long position.| 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 |
| Xintec vs. GameSparcs Co | Xintec vs. International Games System | Xintec vs. Sunfar Computer Co | Xintec vs. Loop Telecommunication International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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