Correlation Between China Xuefeng and Volkswagen
Can any of the company-specific risk be diversified away by investing in both China Xuefeng and Volkswagen 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 Volkswagen 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 Volkswagen AG Pref, you can compare the effects of market volatilities on China Xuefeng and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Xuefeng and Volkswagen.
Diversification Opportunities for China Xuefeng and Volkswagen
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Volkswagen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding China Xuefeng Environmental and Volkswagen AG Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG Pref 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG Pref has no effect on the direction of China Xuefeng i.e., China Xuefeng and Volkswagen go up and down completely randomly.
Pair Corralation between China Xuefeng and Volkswagen
Given the investment horizon of 90 days China Xuefeng Environmental is expected to generate 16.35 times more return on investment than Volkswagen. However, China Xuefeng is 16.35 times more volatile than Volkswagen AG Pref. It trades about 0.09 of its potential returns per unit of risk. Volkswagen AG Pref is currently generating about -0.01 per unit of risk. If you would invest 9.00 in China Xuefeng Environmental on November 2, 2024 and sell it today you would lose (7.20) from holding China Xuefeng Environmental or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Xuefeng Environmental vs. Volkswagen AG Pref
Performance |
| Timeline |
| China Xuefeng Enviro |
| Volkswagen AG Pref |
China Xuefeng and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Xuefeng and Volkswagen
The main advantage of trading using opposite China Xuefeng and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Xuefeng position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| China Xuefeng vs. Vaporbrands Intl | China Xuefeng vs. Faraday Future Intelligent | China Xuefeng vs. Aston Martin Lagonda | China Xuefeng vs. Polestar Automotive Holding |
| Volkswagen vs. Volkswagen AG 110 | Volkswagen vs. Porsche Automobil Holding | Volkswagen vs. Ferrari NV | Volkswagen 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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