Correlation Between Xinhua Winshare and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Spirent Communications 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 Spirent Communications 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 Spirent Communications plc, you can compare the effects of market volatilities on Xinhua Winshare and Spirent Communications 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 Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Spirent Communications.
Diversification Opportunities for Xinhua Winshare and Spirent Communications
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xinhua and Spirent is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications 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 Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Spirent Communications go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Spirent Communications
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to under-perform the Spirent Communications. In addition to that, Xinhua Winshare is 1.56 times more volatile than Spirent Communications plc. It trades about -0.07 of its total potential returns per unit of risk. Spirent Communications plc is currently generating about 0.05 per unit of volatility. If you would invest 204.00 in Spirent Communications plc on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Spirent Communications plc or generate 0.98% 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. Spirent Communications plc
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Spirent Communications |
Xinhua Winshare and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Spirent Communications
The main advantage of trading using opposite Xinhua Winshare and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' 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 |
| Spirent Communications vs. FORWARD AIR P | Spirent Communications vs. MYFAIR GOLD P | Spirent Communications vs. WIZZ AIR HLDGUNSPADR4 | Spirent Communications vs. Air New Zealand |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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