Correlation Between Xinhua Winshare and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and CN MODERN 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 Xinhua Winshare and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinhua Winshare Publishing and CN MODERN DAIRY, you can compare the effects of market volatilities on Xinhua Winshare and CN MODERN 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 Xinhua Winshare with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and CN MODERN.
Diversification Opportunities for Xinhua Winshare and CN MODERN
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xinhua and 07M is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY and Xinhua Winshare 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 Xinhua Winshare Publishing are associated (or correlated) with CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and CN MODERN go up and down completely randomly.
Pair Corralation between Xinhua Winshare and CN MODERN
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 1.82 times more return on investment than CN MODERN. However, Xinhua Winshare is 1.82 times more volatile than CN MODERN DAIRY. It trades about 0.12 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.03 per unit of risk. If you would invest 12.00 in Xinhua Winshare Publishing on September 14, 2024 and sell it today you would earn a total of 116.00 from holding Xinhua Winshare Publishing or generate 966.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. CN MODERN DAIRY
Performance |
| Timeline |
| Xinhua Winshare Publ |
| CN MODERN DAIRY |
Xinhua Winshare and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and CN MODERN
The main advantage of trading using opposite Xinhua Winshare and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| Xinhua Winshare vs. Superior Plus Corp | Xinhua Winshare vs. SIVERS SEMICONDUCTORS AB | Xinhua Winshare vs. Norsk Hydro ASA | Xinhua Winshare vs. Reliance Steel Aluminum |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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