Correlation Between Ebara Corp and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Ebara Corp and Xinjiang Goldwind 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 Ebara Corp and Xinjiang Goldwind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebara Corp ADR and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Ebara Corp and Xinjiang Goldwind 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 Ebara Corp with a short position of Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebara Corp and Xinjiang Goldwind.
Diversification Opportunities for Ebara Corp and Xinjiang Goldwind
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ebara and Xinjiang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ebara Corp ADR and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science and Ebara Corp 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 Ebara Corp ADR are associated (or correlated) with Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Ebara Corp i.e., Ebara Corp and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Ebara Corp and Xinjiang Goldwind
Assuming the 90 days horizon Ebara Corp ADR is expected to under-perform the Xinjiang Goldwind. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ebara Corp ADR is 1.02 times less risky than Xinjiang Goldwind. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Xinjiang Goldwind Science is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 84.00 in Xinjiang Goldwind Science on September 1, 2024 and sell it today you would lose (4.00) from holding Xinjiang Goldwind Science or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebara Corp ADR vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Ebara Corp ADR |
| Xinjiang Goldwind Science |
Ebara Corp and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebara Corp and Xinjiang Goldwind
The main advantage of trading using opposite Ebara Corp and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebara Corp position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind's long position.| Ebara Corp vs. Xinjiang Goldwind Science | Ebara Corp vs. Schneider Electric SE | Ebara Corp vs. Vestas Wind Systems |
| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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