Correlation Between GEAR4MUSIC and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both GEAR4MUSIC and Xinhua Winshare 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 GEAR4MUSIC and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEAR4MUSIC LS 10 and Xinhua Winshare Publishing, you can compare the effects of market volatilities on GEAR4MUSIC and Xinhua Winshare 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 GEAR4MUSIC with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEAR4MUSIC and Xinhua Winshare.
Diversification Opportunities for GEAR4MUSIC and Xinhua Winshare
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GEAR4MUSIC and Xinhua is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding GEAR4MUSIC LS 10 and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and GEAR4MUSIC 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 GEAR4MUSIC LS 10 are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of GEAR4MUSIC i.e., GEAR4MUSIC and Xinhua Winshare go up and down completely randomly.
Pair Corralation between GEAR4MUSIC and Xinhua Winshare
Assuming the 90 days horizon GEAR4MUSIC LS 10 is expected to generate 1.12 times more return on investment than Xinhua Winshare. However, GEAR4MUSIC is 1.12 times more volatile than Xinhua Winshare Publishing. It trades about 0.08 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.09 per unit of risk. If you would invest 151.00 in GEAR4MUSIC LS 10 on September 3, 2024 and sell it today you would earn a total of 44.00 from holding GEAR4MUSIC LS 10 or generate 29.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEAR4MUSIC LS 10 vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| GEAR4MUSIC LS 10 |
| Xinhua Winshare Publ |
GEAR4MUSIC and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEAR4MUSIC and Xinhua Winshare
The main advantage of trading using opposite GEAR4MUSIC and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEAR4MUSIC position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| GEAR4MUSIC vs. Amazon Inc | GEAR4MUSIC vs. Alibaba Group Holdings | GEAR4MUSIC vs. JD Inc | GEAR4MUSIC vs. Superior Plus Corp |
| Xinhua Winshare vs. Superior Plus Corp | Xinhua Winshare vs. NMI Holdings | Xinhua Winshare vs. Origin Agritech | Xinhua Winshare vs. SIVERS SEMICONDUCTORS AB |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stocks Directory Find actively traded stocks across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |