Correlation Between Xinhua Winshare and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and USWE SPORTS 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 USWE SPORTS 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 USWE SPORTS AB, you can compare the effects of market volatilities on Xinhua Winshare and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and USWE SPORTS.
Diversification Opportunities for Xinhua Winshare and USWE SPORTS
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xinhua and USWE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and USWE SPORTS go up and down completely randomly.
Pair Corralation between Xinhua Winshare and USWE SPORTS
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 1.36 times more return on investment than USWE SPORTS. However, Xinhua Winshare is 1.36 times more volatile than USWE SPORTS AB. It trades about 0.13 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about -0.05 per unit of risk. If you would invest 38.00 in Xinhua Winshare Publishing on November 8, 2024 and sell it today you would earn a total of 90.00 from holding Xinhua Winshare Publishing or generate 236.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. USWE SPORTS AB
Performance |
| Timeline |
| Xinhua Winshare Publ |
| USWE SPORTS AB |
Xinhua Winshare and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and USWE SPORTS
The main advantage of trading using opposite Xinhua Winshare and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| Xinhua Winshare vs. DETALION GAMES SA | Xinhua Winshare vs. GAMING FAC SA | Xinhua Winshare vs. CONTAGIOUS GAMING INC | Xinhua Winshare vs. Tradegate AG Wertpapierhandelsbank |
| USWE SPORTS vs. Transport International Holdings | USWE SPORTS vs. Penn National Gaming | USWE SPORTS vs. Fukuyama Transporting Co | USWE SPORTS vs. PLAYMATES TOYS |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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