Correlation Between DXP Enterprises and Xinyi Glass
Can any of the company-specific risk be diversified away by investing in both DXP Enterprises 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 DXP Enterprises and Xinyi Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXP Enterprises and Xinyi Glass Holdings, you can compare the effects of market volatilities on DXP Enterprises 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 DXP Enterprises with a short position of Xinyi Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXP Enterprises and Xinyi Glass.
Diversification Opportunities for DXP Enterprises and Xinyi Glass
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DXP and Xinyi is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding DXP Enterprises 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 DXP Enterprises 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 DXP Enterprises 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 DXP Enterprises i.e., DXP Enterprises and Xinyi Glass go up and down completely randomly.
Pair Corralation between DXP Enterprises and Xinyi Glass
Given the investment horizon of 90 days DXP Enterprises is expected to generate 0.36 times more return on investment than Xinyi Glass. However, DXP Enterprises is 2.77 times less risky than Xinyi Glass. It trades about 0.2 of its potential returns per unit of risk. Xinyi Glass Holdings is currently generating about 0.07 per unit of risk. If you would invest 5,259 in DXP Enterprises on October 26, 2024 and sell it today you would earn a total of 5,327 from holding DXP Enterprises or generate 101.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
DXP Enterprises vs. Xinyi Glass Holdings
Performance |
| Timeline |
| DXP Enterprises |
| Xinyi Glass Holdings |
DXP Enterprises and Xinyi Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXP Enterprises and Xinyi Glass
The main advantage of trading using opposite DXP Enterprises and Xinyi Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXP Enterprises 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.| DXP Enterprises vs. Global Industrial Co | DXP Enterprises vs. EVI Industries | DXP Enterprises vs. Core Main | DXP Enterprises vs. Watsco Inc |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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