Correlation Between Century Iron and Xintec
Can any of the company-specific risk be diversified away by investing in both Century Iron 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 Century Iron and Xintec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Iron And and Xintec, you can compare the effects of market volatilities on Century Iron 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 Century Iron with a short position of Xintec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Iron and Xintec.
Diversification Opportunities for Century Iron and Xintec
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Xintec is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Century Iron And and Xintec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintec and Century Iron 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 Century Iron And 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 Century Iron i.e., Century Iron and Xintec go up and down completely randomly.
Pair Corralation between Century Iron and Xintec
Assuming the 90 days trading horizon Century Iron is expected to generate 1.42 times less return on investment than Xintec. In addition to that, Century Iron is 1.14 times more volatile than Xintec. It trades about 0.03 of its total potential returns per unit of risk. Xintec is currently generating about 0.05 per unit of volatility. If you would invest 13,497 in Xintec on September 12, 2024 and sell it today you would earn a total of 6,503 from holding Xintec or generate 48.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Century Iron And vs. Xintec
Performance |
| Timeline |
| Century Iron And |
| Xintec |
Century Iron and Xintec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Iron and Xintec
The main advantage of trading using opposite Century Iron and Xintec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Iron 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.| Century Iron vs. Tainan Spinning Co | Century Iron vs. Lealea Enterprise Co | Century Iron vs. China Petrochemical Development | Century Iron vs. Ruentex Development Co |
| Xintec vs. Wei Chih Steel | Xintec vs. Century Iron And | Xintec vs. Lian Hwa Foods | Xintec vs. Tang Eng Iron |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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