Correlation Between Alset Ehome and Xinyuan Real
Can any of the company-specific risk be diversified away by investing in both Alset Ehome and Xinyuan Real 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 Alset Ehome and Xinyuan Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alset Ehome International and Xinyuan Real Estate, you can compare the effects of market volatilities on Alset Ehome and Xinyuan Real 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 Alset Ehome with a short position of Xinyuan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alset Ehome and Xinyuan Real.
Diversification Opportunities for Alset Ehome and Xinyuan Real
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alset and Xinyuan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alset Ehome International and Xinyuan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyuan Real Estate and Alset Ehome 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 Alset Ehome International are associated (or correlated) with Xinyuan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyuan Real Estate has no effect on the direction of Alset Ehome i.e., Alset Ehome and Xinyuan Real go up and down completely randomly.
Pair Corralation between Alset Ehome and Xinyuan Real
Considering the 90-day investment horizon Alset Ehome International is expected to under-perform the Xinyuan Real. In addition to that, Alset Ehome is 1.14 times more volatile than Xinyuan Real Estate. It trades about -0.01 of its total potential returns per unit of risk. Xinyuan Real Estate is currently generating about 0.02 per unit of volatility. If you would invest 438.00 in Xinyuan Real Estate on August 28, 2024 and sell it today you would lose (113.00) from holding Xinyuan Real Estate or give up 25.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alset Ehome International vs. Xinyuan Real Estate
Performance |
| Timeline |
| Alset Ehome International |
| Xinyuan Real Estate |
Alset Ehome and Xinyuan Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alset Ehome and Xinyuan Real
The main advantage of trading using opposite Alset Ehome and Xinyuan Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alset Ehome position performs unexpectedly, Xinyuan Real 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 Xinyuan Real will offset losses from the drop in Xinyuan Real's long position.| Alset Ehome vs. Xinyuan Real Estate | Alset Ehome vs. AMREP | Alset Ehome vs. Landsea Homes Corp | Alset Ehome vs. Sino Land Co |
| Xinyuan Real vs. Investcorp Credit Management | Xinyuan Real vs. Medalist Diversified Reit | Xinyuan Real vs. Aquagold International | Xinyuan Real vs. Morningstar Unconstrained Allocation |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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