Correlation Between Xinhua Winshare and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Xinhua Winshare and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and SWISS WATER.
Diversification Opportunities for Xinhua Winshare and SWISS WATER
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinhua and SWISS is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and SWISS WATER go up and down completely randomly.
Pair Corralation between Xinhua Winshare and SWISS WATER
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to under-perform the SWISS WATER. But the stock apears to be less risky and, when comparing its historical volatility, Xinhua Winshare Publishing is 1.43 times less risky than SWISS WATER. The stock trades about -0.11 of its potential returns per unit of risk. The SWISS WATER DECAFFCOFFEE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 262.00 in SWISS WATER DECAFFCOFFEE on August 29, 2024 and sell it today you would earn a total of 10.00 from holding SWISS WATER DECAFFCOFFEE or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Xinhua Winshare Publ |
| SWISS WATER DECAFFCOFFEE |
Xinhua Winshare and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and SWISS WATER
The main advantage of trading using opposite Xinhua Winshare and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Xinhua Winshare vs. Superior Plus Corp | Xinhua Winshare vs. NMI Holdings | Xinhua Winshare vs. Origin Agritech | Xinhua Winshare vs. SIVERS SEMICONDUCTORS AB |
| SWISS WATER vs. RYU Apparel | SWISS WATER vs. New Residential Investment | SWISS WATER vs. American Eagle Outfitters | SWISS WATER vs. PennyMac Mortgage Investment |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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