Correlation Between Xinhua Winshare and Edwards Lifesciences
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Edwards Lifesciences 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 Edwards Lifesciences 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 Edwards Lifesciences, you can compare the effects of market volatilities on Xinhua Winshare and Edwards Lifesciences 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 Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Edwards Lifesciences.
Diversification Opportunities for Xinhua Winshare and Edwards Lifesciences
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinhua and Edwards is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Edwards Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edwards Lifesciences 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 Edwards Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edwards Lifesciences has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Edwards Lifesciences go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Edwards Lifesciences
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 0.83 times more return on investment than Edwards Lifesciences. However, Xinhua Winshare Publishing is 1.2 times less risky than Edwards Lifesciences. It trades about 0.09 of its potential returns per unit of risk. Edwards Lifesciences is currently generating about -0.02 per unit of risk. If you would invest 90.00 in Xinhua Winshare Publishing on September 3, 2024 and sell it today you would earn a total of 26.00 from holding Xinhua Winshare Publishing or generate 28.89% 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. Edwards Lifesciences
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Edwards Lifesciences |
Xinhua Winshare and Edwards Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Edwards Lifesciences
The main advantage of trading using opposite Xinhua Winshare and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Edwards Lifesciences 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 Edwards Lifesciences will offset losses from the drop in Edwards Lifesciences' long position.| Xinhua Winshare vs. Superior Plus Corp | Xinhua Winshare vs. NMI Holdings | Xinhua Winshare vs. Origin Agritech | Xinhua Winshare vs. SIVERS SEMICONDUCTORS AB |
| Edwards Lifesciences vs. DEVRY EDUCATION GRP | Edwards Lifesciences vs. Xinhua Winshare Publishing | Edwards Lifesciences vs. Strategic Education | Edwards Lifesciences vs. CAREER EDUCATION |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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