Correlation Between Xinhua Winshare and SHIN-ETSU CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and SHIN-ETSU CHEMICAL 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 SHIN-ETSU CHEMICAL 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 SHIN ETSU CHEMICAL , you can compare the effects of market volatilities on Xinhua Winshare and SHIN-ETSU CHEMICAL 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 SHIN-ETSU CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and SHIN-ETSU CHEMICAL.
Diversification Opportunities for Xinhua Winshare and SHIN-ETSU CHEMICAL
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xinhua and SHIN-ETSU is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and SHIN ETSU CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIN ETSU CHEMICAL 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 SHIN-ETSU CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIN ETSU CHEMICAL has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and SHIN-ETSU CHEMICAL go up and down completely randomly.
Pair Corralation between Xinhua Winshare and SHIN-ETSU CHEMICAL
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 1.08 times more return on investment than SHIN-ETSU CHEMICAL. However, Xinhua Winshare is 1.08 times more volatile than SHIN ETSU CHEMICAL . It trades about -0.08 of its potential returns per unit of risk. SHIN ETSU CHEMICAL is currently generating about -0.14 per unit of risk. If you would invest 130.00 in Xinhua Winshare Publishing on December 11, 2024 and sell it today you would lose (10.00) from holding Xinhua Winshare Publishing or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. SHIN ETSU CHEMICAL
Performance |
| Timeline |
| Xinhua Winshare Publ |
| SHIN ETSU CHEMICAL |
Xinhua Winshare and SHIN-ETSU CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and SHIN-ETSU CHEMICAL
The main advantage of trading using opposite Xinhua Winshare and SHIN-ETSU CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, SHIN-ETSU CHEMICAL 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 SHIN-ETSU CHEMICAL will offset losses from the drop in SHIN-ETSU CHEMICAL's long position.| Xinhua Winshare vs. H2O Retailing | Xinhua Winshare vs. Playtech plc | Xinhua Winshare vs. GOME Retail Holdings | Xinhua Winshare vs. Costco Wholesale Corp |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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