Correlation Between China Xuefeng and Aston Martin
Can any of the company-specific risk be diversified away by investing in both China Xuefeng and Aston Martin 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 China Xuefeng and Aston Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Xuefeng Environmental and Aston Martin Lagonda, you can compare the effects of market volatilities on China Xuefeng and Aston Martin 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 China Xuefeng with a short position of Aston Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Xuefeng and Aston Martin.
Diversification Opportunities for China Xuefeng and Aston Martin
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Aston is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding China Xuefeng Environmental and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda and China Xuefeng 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 China Xuefeng Environmental are associated (or correlated) with Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of China Xuefeng i.e., China Xuefeng and Aston Martin go up and down completely randomly.
Pair Corralation between China Xuefeng and Aston Martin
Given the investment horizon of 90 days China Xuefeng Environmental is expected to generate 7.28 times more return on investment than Aston Martin. However, China Xuefeng is 7.28 times more volatile than Aston Martin Lagonda. It trades about 0.1 of its potential returns per unit of risk. Aston Martin Lagonda is currently generating about 0.01 per unit of risk. 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Xuefeng Environmental vs. Aston Martin Lagonda
Performance |
| Timeline |
| China Xuefeng Enviro |
| Aston Martin Lagonda |
China Xuefeng and Aston Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Xuefeng and Aston Martin
The main advantage of trading using opposite China Xuefeng and Aston Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Xuefeng position performs unexpectedly, Aston Martin 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 Aston Martin will offset losses from the drop in Aston Martin's long position.| China Xuefeng vs. Isuzu Motors | China Xuefeng vs. Renault SA | China Xuefeng vs. Toyota Motor Corp | China Xuefeng vs. Porsche Automobile Holding |
| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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