Correlation Between Cenntro Electric and China Xuefeng
Can any of the company-specific risk be diversified away by investing in both Cenntro Electric 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 Cenntro Electric and China Xuefeng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenntro Electric Group and China Xuefeng Environmental, you can compare the effects of market volatilities on Cenntro Electric 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 Cenntro Electric with a short position of China Xuefeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenntro Electric and China Xuefeng.
Diversification Opportunities for Cenntro Electric and China Xuefeng
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cenntro and China is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cenntro Electric Group 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 Cenntro Electric 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 Cenntro Electric Group 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 Cenntro Electric i.e., Cenntro Electric and China Xuefeng go up and down completely randomly.
Pair Corralation between Cenntro Electric and China Xuefeng
Given the investment horizon of 90 days Cenntro Electric Group is expected to under-perform the China Xuefeng. But the stock apears to be less risky and, when comparing its historical volatility, Cenntro Electric Group is 3.6 times less risky than China Xuefeng. The stock trades about -0.04 of its potential returns per unit of risk. The China Xuefeng Environmental is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7.00 in China Xuefeng Environmental on August 28, 2024 and sell it today you would lose (4.70) from holding China Xuefeng Environmental or give up 67.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cenntro Electric Group vs. China Xuefeng Environmental
Performance |
| Timeline |
| Cenntro Electric |
| China Xuefeng Enviro |
Cenntro Electric and China Xuefeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenntro Electric and China Xuefeng
The main advantage of trading using opposite Cenntro Electric and China Xuefeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenntro Electric 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.| Cenntro Electric vs. Mullen Automotive | Cenntro Electric vs. Canoo Inc | Cenntro Electric vs. Hyzon Motors | Cenntro Electric vs. AYRO Inc |
| China Xuefeng vs. Isuzu Motors | China Xuefeng vs. Renault SA | China Xuefeng vs. Toyota Motor Corp | China Xuefeng vs. Porsche Automobile Holding |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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