Correlation Between Xinhua Winshare and Albemarle
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Albemarle 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 Albemarle 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 Albemarle, you can compare the effects of market volatilities on Xinhua Winshare and Albemarle 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 Albemarle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Albemarle.
Diversification Opportunities for Xinhua Winshare and Albemarle
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinhua and Albemarle is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Albemarle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albemarle 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 Albemarle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albemarle has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Albemarle go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Albemarle
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to under-perform the Albemarle. But the stock apears to be less risky and, when comparing its historical volatility, Xinhua Winshare Publishing is 2.61 times less risky than Albemarle. The stock trades about -0.06 of its potential returns per unit of risk. The Albemarle is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9,038 in Albemarle on August 30, 2024 and sell it today you would earn a total of 1,238 from holding Albemarle or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. Albemarle
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Albemarle |
Xinhua Winshare and Albemarle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Albemarle
The main advantage of trading using opposite Xinhua Winshare and Albemarle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Albemarle 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 Albemarle will offset losses from the drop in Albemarle's long position.| Xinhua Winshare vs. The New York | Xinhua Winshare vs. Superior Plus Corp | Xinhua Winshare vs. NMI Holdings | Xinhua Winshare vs. SIVERS SEMICONDUCTORS AB |
| Albemarle vs. Sumitomo Mitsui Construction | Albemarle vs. Xinhua Winshare Publishing | Albemarle vs. Australian Agricultural | Albemarle vs. HYDROFARM HLD GRP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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