Correlation Between Xinhua Winshare and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement SA, you can compare the effects of market volatilities on Xinhua Winshare and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Veolia Environnement.
Diversification Opportunities for Xinhua Winshare and Veolia Environnement
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xinhua and Veolia is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Veolia Environnement go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Veolia Environnement
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 1.55 times more return on investment than Veolia Environnement. However, Xinhua Winshare is 1.55 times more volatile than Veolia Environnement SA. It trades about 0.62 of its potential returns per unit of risk. Veolia Environnement SA is currently generating about -0.18 per unit of risk. If you would invest 113.00 in Xinhua Winshare Publishing on September 22, 2024 and sell it today you would earn a total of 26.00 from holding Xinhua Winshare Publishing or generate 23.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. Veolia Environnement SA
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Veolia Environnement |
Xinhua Winshare and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Veolia Environnement
The main advantage of trading using opposite Xinhua Winshare and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| Xinhua Winshare vs. Tri Pointe Homes | Xinhua Winshare vs. CHINA TONTINE WINES | Xinhua Winshare vs. BJs Restaurants | Xinhua Winshare vs. VARIOUS EATERIES LS |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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