Correlation Between THORNEY TECHS and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both THORNEY TECHS and Xinhua Winshare 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 THORNEY TECHS and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THORNEY TECHS LTD and Xinhua Winshare Publishing, you can compare the effects of market volatilities on THORNEY TECHS and Xinhua Winshare 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 THORNEY TECHS with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of THORNEY TECHS and Xinhua Winshare.
Diversification Opportunities for THORNEY TECHS and Xinhua Winshare
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between THORNEY and Xinhua is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and THORNEY TECHS 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 THORNEY TECHS LTD are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of THORNEY TECHS i.e., THORNEY TECHS and Xinhua Winshare go up and down completely randomly.
Pair Corralation between THORNEY TECHS and Xinhua Winshare
Assuming the 90 days horizon THORNEY TECHS is expected to generate 5.82 times less return on investment than Xinhua Winshare. In addition to that, THORNEY TECHS is 1.13 times more volatile than Xinhua Winshare Publishing. It trades about 0.02 of its total potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.14 per unit of volatility. If you would invest 30.00 in Xinhua Winshare Publishing on September 4, 2024 and sell it today you would earn a total of 86.00 from holding Xinhua Winshare Publishing or generate 286.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
THORNEY TECHS LTD vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| THORNEY TECHS LTD |
| Xinhua Winshare Publ |
THORNEY TECHS and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THORNEY TECHS and Xinhua Winshare
The main advantage of trading using opposite THORNEY TECHS and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THORNEY TECHS position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc |
| Xinhua Winshare vs. Lery Seafood Group | Xinhua Winshare vs. THORNEY TECHS LTD | Xinhua Winshare vs. PT Indofood Sukses | Xinhua Winshare vs. Japan Tobacco |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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