Correlation Between SPI Energy and Xinyi Solar
Can any of the company-specific risk be diversified away by investing in both SPI Energy 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 SPI Energy and Xinyi Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPI Energy Co and Xinyi Solar Holdings, you can compare the effects of market volatilities on SPI Energy 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 SPI Energy with a short position of Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPI Energy and Xinyi Solar.
Diversification Opportunities for SPI Energy and Xinyi Solar
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPI and Xinyi is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SPI Energy Co 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 SPI Energy 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 SPI Energy Co 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 SPI Energy i.e., SPI Energy and Xinyi Solar go up and down completely randomly.
Pair Corralation between SPI Energy and Xinyi Solar
Considering the 90-day investment horizon SPI Energy Co is expected to generate 2.22 times more return on investment than Xinyi Solar. However, SPI Energy is 2.22 times more volatile than Xinyi Solar Holdings. It trades about -0.18 of its potential returns per unit of risk. Xinyi Solar Holdings is currently generating about -0.41 per unit of risk. If you would invest 42.00 in SPI Energy Co on August 28, 2024 and sell it today you would lose (11.00) from holding SPI Energy Co or give up 26.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPI Energy Co vs. Xinyi Solar Holdings
Performance |
| Timeline |
| SPI Energy |
| Xinyi Solar Holdings |
SPI Energy and Xinyi Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPI Energy and Xinyi Solar
The main advantage of trading using opposite SPI Energy and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPI Energy 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.| SPI Energy vs. Ascent Solar Technologies, | SPI Energy vs. Emeren Group | SPI Energy vs. Sunrun Inc | SPI Energy vs. Sunnova Energy International |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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