Correlation Between Aston Martin and China Xuefeng
Can any of the company-specific risk be diversified away by investing in both Aston Martin and China Xuefeng 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 Aston Martin and China Xuefeng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and China Xuefeng Environmental, you can compare the effects of market volatilities on Aston Martin and China Xuefeng 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 Aston Martin with a short position of China Xuefeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and China Xuefeng.
Diversification Opportunities for Aston Martin and China Xuefeng
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aston and China is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and China Xuefeng Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Xuefeng Enviro and Aston Martin 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 Aston Martin Lagonda are associated (or correlated) with China Xuefeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Xuefeng Enviro has no effect on the direction of Aston Martin i.e., Aston Martin and China Xuefeng go up and down completely randomly.
Pair Corralation between Aston Martin and China Xuefeng
Assuming the 90 days horizon Aston Martin is expected to generate 199.36 times less return on investment than China Xuefeng. But when comparing it to its historical volatility, Aston Martin Lagonda is 9.36 times less risky than China Xuefeng. It trades about 0.01 of its potential returns per unit of risk. China Xuefeng Environmental is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2.00 in China Xuefeng Environmental on October 21, 2024 and sell it today you would earn a total of 1.00 from holding China Xuefeng Environmental or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Martin Lagonda vs. China Xuefeng Environmental
Performance |
| Timeline |
| Aston Martin Lagonda |
| China Xuefeng Enviro |
Aston Martin and China Xuefeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and China Xuefeng
The main advantage of trading using opposite Aston Martin and China Xuefeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin position performs unexpectedly, China Xuefeng 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 China Xuefeng will offset losses from the drop in China Xuefeng's long position.| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
| China Xuefeng vs. Isuzu Motors | China Xuefeng vs. Honda Motor Co | China Xuefeng vs. Porsche Automobil Holding | China Xuefeng vs. Mazda Motor Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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