Correlation Between TAL Education and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both TAL Education 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 TAL Education and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAL Education Group and Xinhua Winshare Publishing, you can compare the effects of market volatilities on TAL Education 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 TAL Education with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and Xinhua Winshare.
Diversification Opportunities for TAL Education and Xinhua Winshare
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TAL and Xinhua is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group 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 TAL Education 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 TAL Education Group 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 TAL Education i.e., TAL Education and Xinhua Winshare go up and down completely randomly.
Pair Corralation between TAL Education and Xinhua Winshare
Assuming the 90 days trading horizon TAL Education Group is expected to under-perform the Xinhua Winshare. In addition to that, TAL Education is 2.08 times more volatile than Xinhua Winshare Publishing. It trades about -0.1 of its total potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about -0.11 per unit of volatility. If you would invest 118.00 in Xinhua Winshare Publishing on August 29, 2024 and sell it today you would lose (5.00) from holding Xinhua Winshare Publishing or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAL Education Group vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| TAL Education Group |
| Xinhua Winshare Publ |
TAL Education and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAL Education and Xinhua Winshare
The main advantage of trading using opposite TAL Education and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education 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.| TAL Education vs. Apple Inc | TAL Education vs. Apple Inc | TAL Education vs. Apple Inc | TAL Education vs. Apple Inc |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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