Correlation Between Xinhua Winshare and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Charter 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 Charter 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 Charter Communications, you can compare the effects of market volatilities on Xinhua Winshare and Charter 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Charter Communications.
Diversification Opportunities for Xinhua Winshare and Charter Communications
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinhua and Charter is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Charter Communications go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Charter Communications
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 1.45 times more return on investment than Charter Communications. However, Xinhua Winshare is 1.45 times more volatile than Charter Communications. It trades about -0.08 of its potential returns per unit of risk. Charter Communications is currently generating about -0.37 per unit of risk. If you would invest 134.00 in Xinhua Winshare Publishing on October 15, 2024 and sell it today you would lose (4.00) from holding Xinhua Winshare Publishing or give up 2.99% 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. Charter Communications
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Charter Communications |
Xinhua Winshare and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Charter Communications
The main advantage of trading using opposite Xinhua Winshare and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Charter 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Xinhua Winshare vs. CeoTronics AG | Xinhua Winshare vs. FORMPIPE SOFTWARE AB | Xinhua Winshare vs. CEOTRONICS | Xinhua Winshare vs. Take Two Interactive Software |
| Charter Communications vs. GREENX METALS LTD | Charter Communications vs. Forsys Metals Corp | Charter Communications vs. GRIFFIN MINING LTD | Charter Communications vs. The Yokohama Rubber |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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