Correlation Between Xinhua Winshare and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Xinhua Winshare and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and CHINA EDUCATION.
Diversification Opportunities for Xinhua Winshare and CHINA EDUCATION
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinhua and CHINA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Xinhua Winshare and CHINA EDUCATION
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 0.38 times more return on investment than CHINA EDUCATION. However, Xinhua Winshare Publishing is 2.65 times less risky than CHINA EDUCATION. It trades about -0.17 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.16 per unit of risk. If you would invest 122.00 in Xinhua Winshare Publishing on August 25, 2024 and sell it today you would lose (8.00) from holding Xinhua Winshare Publishing or give up 6.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Xinhua Winshare Publ |
| CHINA EDUCATION GROUP |
Xinhua Winshare and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and CHINA EDUCATION
The main advantage of trading using opposite Xinhua Winshare and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION'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 |
| CHINA EDUCATION vs. Zoom Video Communications | CHINA EDUCATION vs. AUTO TRADER ADR | CHINA EDUCATION vs. Tradeweb Markets | CHINA EDUCATION vs. MOVIE GAMES SA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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