Correlation Between Xinhua Winshare and Yakult Honsha
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Yakult Honsha 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 Yakult Honsha 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 Yakult Honsha CoLtd, you can compare the effects of market volatilities on Xinhua Winshare and Yakult Honsha 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 Yakult Honsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Yakult Honsha.
Diversification Opportunities for Xinhua Winshare and Yakult Honsha
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xinhua and Yakult is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Yakult Honsha CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yakult Honsha CoLtd 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 Yakult Honsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yakult Honsha CoLtd has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Yakult Honsha go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Yakult Honsha
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 2.43 times more return on investment than Yakult Honsha. However, Xinhua Winshare is 2.43 times more volatile than Yakult Honsha CoLtd. It trades about -0.1 of its potential returns per unit of risk. Yakult Honsha CoLtd is currently generating about -0.25 per unit of risk. If you would invest 138.00 in Xinhua Winshare Publishing on October 23, 2024 and sell it today you would lose (6.00) from holding Xinhua Winshare Publishing or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. Yakult Honsha CoLtd
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Yakult Honsha CoLtd |
Xinhua Winshare and Yakult Honsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Yakult Honsha
The main advantage of trading using opposite Xinhua Winshare and Yakult Honsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Yakult Honsha 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 Yakult Honsha will offset losses from the drop in Yakult Honsha's long position.| Xinhua Winshare vs. Air Transport Services | Xinhua Winshare vs. Yuexiu Transport Infrastructure | Xinhua Winshare vs. Gruppo Mutuionline SpA | Xinhua Winshare vs. ZhongAn Online P |
| Yakult Honsha vs. JLF INVESTMENT | Yakult Honsha vs. SLR Investment Corp | Yakult Honsha vs. New Residential Investment | Yakult Honsha vs. Universal Insurance Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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