Correlation Between Xinyuan Real and Lead Real
Can any of the company-specific risk be diversified away by investing in both Xinyuan Real and Lead Real 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 Xinyuan Real and Lead Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinyuan Real Estate and Lead Real Estate, you can compare the effects of market volatilities on Xinyuan Real and Lead Real 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 Xinyuan Real with a short position of Lead Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyuan Real and Lead Real.
Diversification Opportunities for Xinyuan Real and Lead Real
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinyuan and Lead is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Xinyuan Real Estate and Lead Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lead Real Estate and Xinyuan Real 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 Xinyuan Real Estate are associated (or correlated) with Lead Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lead Real Estate has no effect on the direction of Xinyuan Real i.e., Xinyuan Real and Lead Real go up and down completely randomly.
Pair Corralation between Xinyuan Real and Lead Real
Considering the 90-day investment horizon Xinyuan Real Estate is expected to generate 0.8 times more return on investment than Lead Real. However, Xinyuan Real Estate is 1.25 times less risky than Lead Real. It trades about 0.02 of its potential returns per unit of risk. Lead Real Estate is currently generating about 0.0 per unit of risk. If you would invest 438.00 in Xinyuan Real Estate on August 28, 2024 and sell it today you would lose (113.00) from holding Xinyuan Real Estate or give up 25.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 59.39% |
| Values | Daily Returns |
Xinyuan Real Estate vs. Lead Real Estate
Performance |
| Timeline |
| Xinyuan Real Estate |
| Lead Real Estate |
Xinyuan Real and Lead Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinyuan Real and Lead Real
The main advantage of trading using opposite Xinyuan Real and Lead Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyuan Real position performs unexpectedly, Lead Real 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 Lead Real will offset losses from the drop in Lead Real's long position.| Xinyuan Real vs. Investcorp Credit Management | Xinyuan Real vs. Medalist Diversified Reit | Xinyuan Real vs. Aquagold International | Xinyuan Real vs. Morningstar Unconstrained Allocation |
| Lead Real vs. Investcorp Credit Management | Lead Real vs. Medalist Diversified Reit | Lead Real vs. Aquagold International | Lead Real vs. Morningstar Unconstrained Allocation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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