Correlation Between Buzzi Unicem and Xinyi Glass
Can any of the company-specific risk be diversified away by investing in both Buzzi Unicem and Xinyi Glass 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 Buzzi Unicem and Xinyi Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buzzi Unicem SpA and Xinyi Glass Holdings, you can compare the effects of market volatilities on Buzzi Unicem and Xinyi Glass 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 Buzzi Unicem with a short position of Xinyi Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buzzi Unicem and Xinyi Glass.
Diversification Opportunities for Buzzi Unicem and Xinyi Glass
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Buzzi and Xinyi is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Buzzi Unicem SpA and Xinyi Glass Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Glass Holdings and Buzzi Unicem 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 Buzzi Unicem SpA are associated (or correlated) with Xinyi Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Glass Holdings has no effect on the direction of Buzzi Unicem i.e., Buzzi Unicem and Xinyi Glass go up and down completely randomly.
Pair Corralation between Buzzi Unicem and Xinyi Glass
Assuming the 90 days horizon Buzzi Unicem SpA is expected to generate 3.38 times more return on investment than Xinyi Glass. However, Buzzi Unicem is 3.38 times more volatile than Xinyi Glass Holdings. It trades about 0.22 of its potential returns per unit of risk. Xinyi Glass Holdings is currently generating about 0.23 per unit of risk. If you would invest 1,918 in Buzzi Unicem SpA on August 27, 2024 and sell it today you would earn a total of 234.00 from holding Buzzi Unicem SpA or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buzzi Unicem SpA vs. Xinyi Glass Holdings
Performance |
| Timeline |
| Buzzi Unicem SpA |
| Xinyi Glass Holdings |
Buzzi Unicem and Xinyi Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buzzi Unicem and Xinyi Glass
The main advantage of trading using opposite Buzzi Unicem and Xinyi Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buzzi Unicem position performs unexpectedly, Xinyi Glass 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 Glass will offset losses from the drop in Xinyi Glass' long position.| Buzzi Unicem vs. China National Building | Buzzi Unicem vs. Anhui Conch Cement | Buzzi Unicem vs. Lafargeholcim Ltd ADR | Buzzi Unicem vs. HeidelbergCement AG ADR |
| Xinyi Glass vs. Anhui Conch Cement | Xinyi Glass vs. CEMEX SAB de | Xinyi Glass vs. CEMATRIX | Xinyi Glass vs. Anhui Conch Cement |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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