Correlation Between GCL Poly and Xinyi Solar
Can any of the company-specific risk be diversified away by investing in both GCL Poly and Xinyi Solar 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 GCL Poly and Xinyi Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCL Poly Energy Holdings and Xinyi Solar Holdings, you can compare the effects of market volatilities on GCL Poly and Xinyi Solar 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 GCL Poly with a short position of Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCL Poly and Xinyi Solar.
Diversification Opportunities for GCL Poly and Xinyi Solar
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GCL and Xinyi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding GCL Poly Energy Holdings and Xinyi Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Solar Holdings and GCL Poly 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 GCL Poly Energy Holdings are associated (or correlated) with Xinyi Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Solar Holdings has no effect on the direction of GCL Poly i.e., GCL Poly and Xinyi Solar go up and down completely randomly.
Pair Corralation between GCL Poly and Xinyi Solar
Assuming the 90 days horizon GCL Poly Energy Holdings is expected to under-perform the Xinyi Solar. In addition to that, GCL Poly is 1.88 times more volatile than Xinyi Solar Holdings. It trades about -0.29 of its total potential returns per unit of risk. Xinyi Solar Holdings is currently generating about -0.44 per unit of volatility. If you would invest 1,036 in Xinyi Solar Holdings on August 28, 2024 and sell it today you would lose (245.00) from holding Xinyi Solar Holdings or give up 23.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GCL Poly Energy Holdings vs. Xinyi Solar Holdings
Performance |
| Timeline |
| GCL Poly Energy |
| Xinyi Solar Holdings |
GCL Poly and Xinyi Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCL Poly and Xinyi Solar
The main advantage of trading using opposite GCL Poly and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCL Poly position performs unexpectedly, Xinyi Solar 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 Xinyi Solar will offset losses from the drop in Xinyi Solar's long position.| GCL Poly vs. SMA Solar Technology | GCL Poly vs. Xinyi Solar Holdings | GCL Poly vs. SMA Solar Technology | GCL Poly vs. Three Sixty Solar |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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