Correlation Between Aurora Solar and Xinyi Solar
Can any of the company-specific risk be diversified away by investing in both Aurora Solar and Xinyi Solar 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 Aurora Solar and Xinyi Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Solar Technologies and Xinyi Solar Holdings, you can compare the effects of market volatilities on Aurora Solar and Xinyi Solar 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 Aurora Solar with a short position of Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Solar and Xinyi Solar.
Diversification Opportunities for Aurora Solar and Xinyi Solar
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurora and Xinyi is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Solar Technologies and Xinyi Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Solar Holdings and Aurora Solar 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 Aurora Solar Technologies are associated (or correlated) with Xinyi Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Solar Holdings has no effect on the direction of Aurora Solar i.e., Aurora Solar and Xinyi Solar go up and down completely randomly.
Pair Corralation between Aurora Solar and Xinyi Solar
Assuming the 90 days horizon Aurora Solar Technologies is expected to generate 3.68 times more return on investment than Xinyi Solar. However, Aurora Solar is 3.68 times more volatile than Xinyi Solar Holdings. It trades about 0.05 of its potential returns per unit of risk. Xinyi Solar Holdings is currently generating about -0.04 per unit of risk. If you would invest 2.60 in Aurora Solar Technologies on September 1, 2024 and sell it today you would lose (1.14) from holding Aurora Solar Technologies or give up 43.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Solar Technologies vs. Xinyi Solar Holdings
Performance |
| Timeline |
| Aurora Solar Technologies |
| Xinyi Solar Holdings |
Aurora Solar and Xinyi Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Solar and Xinyi Solar
The main advantage of trading using opposite Aurora Solar and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Solar position performs unexpectedly, Xinyi Solar 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 Xinyi Solar will offset losses from the drop in Xinyi Solar's long position.| Aurora Solar vs. BCE Inc | Aurora Solar vs. Axiologix | Aurora Solar vs. Advanced Info Service | Aurora Solar vs. HUMANA INC |
| Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. Xinyi Solar Holdings | Xinyi Solar vs. Sunrun Inc | Xinyi Solar vs. SMA Solar Technology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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