Correlation Between NYSE Composite and Xinyi Solar
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Xinyi Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Xinyi Solar Holdings, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Xinyi Solar.
Diversification Opportunities for NYSE Composite and Xinyi Solar
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Xinyi is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 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 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 NYSE Composite i.e., NYSE Composite and Xinyi Solar go up and down completely randomly.
Pair Corralation between NYSE Composite and Xinyi Solar
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.23 times more return on investment than Xinyi Solar. However, NYSE Composite is 4.26 times less risky than Xinyi Solar. It trades about 0.24 of its potential returns per unit of risk. Xinyi Solar Holdings is currently generating about -0.44 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Xinyi Solar Holdings
Performance |
| Timeline |
NYSE Composite and Xinyi Solar Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Xinyi Solar Holdings
Pair trading matchups for Xinyi Solar
Pair Trading with NYSE Composite and Xinyi Solar
The main advantage of trading using opposite NYSE Composite and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. Xinyi Solar Holdings | Xinyi Solar vs. Sunrun Inc | Xinyi Solar vs. SMA Solar Technology |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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