Correlation Between Vicinity and China Xuefeng
Can any of the company-specific risk be diversified away by investing in both Vicinity and China Xuefeng 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 Vicinity and China Xuefeng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicinity Motor Corp and China Xuefeng Environmental, you can compare the effects of market volatilities on Vicinity and China Xuefeng 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 Vicinity with a short position of China Xuefeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity and China Xuefeng.
Diversification Opportunities for Vicinity and China Xuefeng
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vicinity and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Motor Corp and China Xuefeng Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Xuefeng Enviro and Vicinity 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 Vicinity Motor Corp are associated (or correlated) with China Xuefeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Xuefeng Enviro has no effect on the direction of Vicinity i.e., Vicinity and China Xuefeng go up and down completely randomly.
Pair Corralation between Vicinity and China Xuefeng
Considering the 90-day investment horizon Vicinity Motor Corp is expected to under-perform the China Xuefeng. But the stock apears to be less risky and, when comparing its historical volatility, Vicinity Motor Corp is 2.24 times less risky than China Xuefeng. The stock trades about -0.04 of its potential returns per unit of risk. The China Xuefeng Environmental is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7.00 in China Xuefeng Environmental on August 28, 2024 and sell it today you would lose (4.70) from holding China Xuefeng Environmental or give up 67.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vicinity Motor Corp vs. China Xuefeng Environmental
Performance |
| Timeline |
| Vicinity Motor Corp |
| China Xuefeng Enviro |
Vicinity and China Xuefeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicinity and China Xuefeng
The main advantage of trading using opposite Vicinity and China Xuefeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity position performs unexpectedly, China Xuefeng 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 China Xuefeng will offset losses from the drop in China Xuefeng's long position.| Vicinity vs. Blue Bird Corp | Vicinity vs. AYRO Inc | Vicinity vs. BAIC Motor | Vicinity vs. Zapp Electric Vehicles |
| China Xuefeng vs. Isuzu Motors | China Xuefeng vs. Renault SA | China Xuefeng vs. Toyota Motor Corp | China Xuefeng vs. Porsche Automobile Holding |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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