Correlation Between Global Hemp and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Global Hemp 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 Global Hemp and Xinjiang Goldwind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Hemp Group and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Global Hemp 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 Global Hemp with a short position of Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Hemp and Xinjiang Goldwind.
Diversification Opportunities for Global Hemp and Xinjiang Goldwind
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Xinjiang is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Global Hemp Group 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 Global Hemp 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 Global Hemp Group 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 Global Hemp i.e., Global Hemp and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Global Hemp and Xinjiang Goldwind
Assuming the 90 days horizon Global Hemp Group is expected to generate 11.1 times more return on investment than Xinjiang Goldwind. However, Global Hemp is 11.1 times more volatile than Xinjiang Goldwind Science. It trades about 0.12 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about 0.02 per unit of risk. If you would invest 1.00 in Global Hemp Group on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Global Hemp Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.79% |
| Values | Daily Returns |
Global Hemp Group vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Global Hemp Group |
| Xinjiang Goldwind Science |
Global Hemp and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Hemp and Xinjiang Goldwind
The main advantage of trading using opposite Global Hemp and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Hemp 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.| Global Hemp vs. Holloman Energy Corp | Global Hemp vs. cbdMD Inc | Global Hemp vs. Evolus Inc | Global Hemp vs. CV Sciences |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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