Correlation Between NYSE Composite and Xiaomi Corp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Xiaomi Corp 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 NYSE Composite and Xiaomi Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Xiaomi Corp, you can compare the effects of market volatilities on NYSE Composite and Xiaomi Corp 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 NYSE Composite with a short position of Xiaomi Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Xiaomi Corp.
Diversification Opportunities for NYSE Composite and Xiaomi Corp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Xiaomi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Xiaomi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiaomi Corp and NYSE Composite 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 NYSE Composite are associated (or correlated) with Xiaomi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiaomi Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Xiaomi Corp go up and down completely randomly.
Pair Corralation between NYSE Composite and Xiaomi Corp
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.06 times less return on investment than Xiaomi Corp. But when comparing it to its historical volatility, NYSE Composite is 3.93 times less risky than Xiaomi Corp. It trades about 0.24 of its potential returns per unit of risk. Xiaomi Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 332.00 in Xiaomi Corp on August 28, 2024 and sell it today you would earn a total of 34.00 from holding Xiaomi Corp or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Xiaomi Corp
Performance |
| Timeline |
NYSE Composite and Xiaomi Corp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Xiaomi Corp
Pair trading matchups for Xiaomi Corp
Pair Trading with NYSE Composite and Xiaomi Corp
The main advantage of trading using opposite NYSE Composite and Xiaomi Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Xiaomi Corp 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 Xiaomi Corp will offset losses from the drop in Xiaomi Corp's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Xiaomi Corp vs. Zepp Health Corp | Xiaomi Corp vs. Samsung Electronics Co | Xiaomi Corp vs. LG Display Co | Xiaomi Corp vs. Sharp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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