Correlation Between ASSOC BR and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both ASSOC BR and Xinhua Winshare 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 ASSOC BR and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASSOC BR FOODS and Xinhua Winshare Publishing, you can compare the effects of market volatilities on ASSOC BR and Xinhua Winshare 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 ASSOC BR with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSOC BR and Xinhua Winshare.
Diversification Opportunities for ASSOC BR and Xinhua Winshare
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASSOC and Xinhua is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ASSOC BR FOODS and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and ASSOC BR 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 ASSOC BR FOODS are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of ASSOC BR i.e., ASSOC BR and Xinhua Winshare go up and down completely randomly.
Pair Corralation between ASSOC BR and Xinhua Winshare
Assuming the 90 days trading horizon ASSOC BR is expected to generate 5.72 times less return on investment than Xinhua Winshare. But when comparing it to its historical volatility, ASSOC BR FOODS is 3.32 times less risky than Xinhua Winshare. It trades about 0.07 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Xinhua Winshare Publishing on September 14, 2024 and sell it today you would earn a total of 116.00 from holding Xinhua Winshare Publishing or generate 966.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASSOC BR FOODS vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| ASSOC BR FOODS |
| Xinhua Winshare Publ |
ASSOC BR and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSOC BR and Xinhua Winshare
The main advantage of trading using opposite ASSOC BR and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSOC BR position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| ASSOC BR vs. Hormel Foods | ASSOC BR vs. Superior Plus Corp | ASSOC BR vs. SIVERS SEMICONDUCTORS AB | ASSOC BR vs. NorAm Drilling AS |
| Xinhua Winshare vs. Superior Plus Corp | Xinhua Winshare vs. SIVERS SEMICONDUCTORS AB | Xinhua Winshare vs. Norsk Hydro ASA | Xinhua Winshare vs. Reliance Steel Aluminum |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |