Correlation Between Rockwell Automation and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Rockwell Automation 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 Rockwell Automation and Xinjiang Goldwind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockwell Automation and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Rockwell Automation 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 Rockwell Automation with a short position of Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockwell Automation and Xinjiang Goldwind.
Diversification Opportunities for Rockwell Automation and Xinjiang Goldwind
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rockwell and Xinjiang is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Rockwell Automation 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 Rockwell Automation 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 Rockwell Automation 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 Rockwell Automation i.e., Rockwell Automation and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Rockwell Automation and Xinjiang Goldwind
Considering the 90-day investment horizon Rockwell Automation is expected to generate 0.81 times more return on investment than Xinjiang Goldwind. However, Rockwell Automation is 1.23 times less risky than Xinjiang Goldwind. It trades about 0.04 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about -0.12 per unit of risk. If you would invest 28,296 in Rockwell Automation on November 28, 2024 and sell it today you would earn a total of 579.00 from holding Rockwell Automation or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rockwell Automation vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Rockwell Automation |
| Xinjiang Goldwind Science |
Rockwell Automation and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockwell Automation and Xinjiang Goldwind
The main advantage of trading using opposite Rockwell Automation and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockwell Automation 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.| Rockwell Automation vs. Dover | Rockwell Automation vs. Illinois Tool Works | Rockwell Automation vs. Ingersoll Rand | Rockwell Automation vs. Eaton PLC |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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