Correlation Between Xinhua Winshare and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC, you can compare the effects of market volatilities on Xinhua Winshare and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and AstraZeneca PLC.
Diversification Opportunities for Xinhua Winshare and AstraZeneca PLC
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xinhua and AstraZeneca is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Xinhua Winshare and AstraZeneca PLC
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 3.06 times more return on investment than AstraZeneca PLC. However, Xinhua Winshare is 3.06 times more volatile than AstraZeneca PLC. It trades about 0.11 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about 0.01 per unit of risk. If you would invest 12.00 in Xinhua Winshare Publishing on September 12, 2024 and sell it today you would earn a total of 111.00 from holding Xinhua Winshare Publishing or generate 925.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. AstraZeneca PLC
Performance |
| Timeline |
| Xinhua Winshare Publ |
| AstraZeneca PLC |
Xinhua Winshare and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and AstraZeneca PLC
The main advantage of trading using opposite Xinhua Winshare and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Xinhua Winshare vs. Superior Plus Corp | Xinhua Winshare vs. SIVERS SEMICONDUCTORS AB | Xinhua Winshare vs. Norsk Hydro ASA | Xinhua Winshare vs. Reliance Steel Aluminum |
| AstraZeneca PLC vs. Superior Plus Corp | AstraZeneca PLC vs. SIVERS SEMICONDUCTORS AB | AstraZeneca PLC vs. NorAm Drilling AS | AstraZeneca PLC vs. Norsk Hydro ASA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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