Correlation Between Xiaomi Corp and Transurban
Can any of the company-specific risk be diversified away by investing in both Xiaomi Corp and Transurban 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 Xiaomi Corp and Transurban into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xiaomi Corp ADR and Transurban Group, you can compare the effects of market volatilities on Xiaomi Corp and Transurban 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 Xiaomi Corp with a short position of Transurban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiaomi Corp and Transurban.
Diversification Opportunities for Xiaomi Corp and Transurban
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xiaomi and Transurban is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xiaomi Corp ADR and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group and Xiaomi Corp 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 Xiaomi Corp ADR are associated (or correlated) with Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of Xiaomi Corp i.e., Xiaomi Corp and Transurban go up and down completely randomly.
Pair Corralation between Xiaomi Corp and Transurban
Assuming the 90 days horizon Xiaomi Corp ADR is expected to generate 0.94 times more return on investment than Transurban. However, Xiaomi Corp ADR is 1.06 times less risky than Transurban. It trades about 0.15 of its potential returns per unit of risk. Transurban Group is currently generating about 0.04 per unit of risk. If you would invest 1,136 in Xiaomi Corp ADR on September 1, 2024 and sell it today you would earn a total of 674.00 from holding Xiaomi Corp ADR or generate 59.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Xiaomi Corp ADR vs. Transurban Group
Performance |
| Timeline |
| Xiaomi Corp ADR |
| Transurban Group |
Xiaomi Corp and Transurban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiaomi Corp and Transurban
The main advantage of trading using opposite Xiaomi Corp and Transurban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiaomi Corp position performs unexpectedly, Transurban 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 Transurban will offset losses from the drop in Transurban's long position.| Xiaomi Corp vs. Sony Group Corp | Xiaomi Corp vs. LG Display Co | Xiaomi Corp vs. Vuzix Corp Cmn | Xiaomi Corp vs. Sonos Inc |
| Transurban vs. BCE Inc | Transurban vs. Digi International | Transurban vs. Sphere Entertainment Co | Transurban vs. Anterix |
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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