Correlation Between Xinhua Winshare and FATFISH GROUP
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and FATFISH GROUP 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 FATFISH GROUP 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 FATFISH GROUP LTD, you can compare the effects of market volatilities on Xinhua Winshare and FATFISH GROUP 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 FATFISH GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and FATFISH GROUP.
Diversification Opportunities for Xinhua Winshare and FATFISH GROUP
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinhua and FATFISH is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and FATFISH GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FATFISH GROUP LTD 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 FATFISH GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FATFISH GROUP LTD has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and FATFISH GROUP go up and down completely randomly.
Pair Corralation between Xinhua Winshare and FATFISH GROUP
Assuming the 90 days horizon Xinhua Winshare is expected to generate 1.47 times less return on investment than FATFISH GROUP. But when comparing it to its historical volatility, Xinhua Winshare Publishing is 3.31 times less risky than FATFISH GROUP. It trades about 0.12 of its potential returns per unit of risk. FATFISH GROUP LTD is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.70 in FATFISH GROUP LTD on September 4, 2024 and sell it today you would lose (0.15) from holding FATFISH GROUP LTD or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. FATFISH GROUP LTD
Performance |
| Timeline |
| Xinhua Winshare Publ |
| FATFISH GROUP LTD |
Xinhua Winshare and FATFISH GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and FATFISH GROUP
The main advantage of trading using opposite Xinhua Winshare and FATFISH GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, FATFISH GROUP 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 FATFISH GROUP will offset losses from the drop in FATFISH GROUP's long position.| Xinhua Winshare vs. Lery Seafood Group | Xinhua Winshare vs. THORNEY TECHS LTD | Xinhua Winshare vs. PT Indofood Sukses | Xinhua Winshare vs. Japan Tobacco |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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