Correlation Between Xinyi Solar and VivoPower International
Can any of the company-specific risk be diversified away by investing in both Xinyi Solar and VivoPower International 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 Xinyi Solar and VivoPower International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinyi Solar Holdings and VivoPower International PLC, you can compare the effects of market volatilities on Xinyi Solar and VivoPower International 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 Xinyi Solar with a short position of VivoPower International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyi Solar and VivoPower International.
Diversification Opportunities for Xinyi Solar and VivoPower International
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xinyi and VivoPower is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xinyi Solar Holdings and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International and Xinyi Solar 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 Xinyi Solar Holdings are associated (or correlated) with VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of Xinyi Solar i.e., Xinyi Solar and VivoPower International go up and down completely randomly.
Pair Corralation between Xinyi Solar and VivoPower International
Assuming the 90 days horizon Xinyi Solar Holdings is expected to under-perform the VivoPower International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xinyi Solar Holdings is 4.65 times less risky than VivoPower International. The pink sheet trades about -0.04 of its potential returns per unit of risk. The VivoPower International PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 613.00 in VivoPower International PLC on September 1, 2024 and sell it today you would lose (495.00) from holding VivoPower International PLC or give up 80.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinyi Solar Holdings vs. VivoPower International PLC
Performance |
| Timeline |
| Xinyi Solar Holdings |
| VivoPower International |
Xinyi Solar and VivoPower International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinyi Solar and VivoPower International
The main advantage of trading using opposite Xinyi Solar and VivoPower International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyi Solar position performs unexpectedly, VivoPower International 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 VivoPower International will offset losses from the drop in VivoPower International's long position.| Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. Xinyi Solar Holdings | Xinyi Solar vs. Sunrun Inc | Xinyi Solar vs. SMA Solar Technology |
| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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