Correlation Between Xinyi Solar and Solar Integrated
Can any of the company-specific risk be diversified away by investing in both Xinyi Solar and Solar Integrated 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 Solar Integrated 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 Solar Integrated Roofing, you can compare the effects of market volatilities on Xinyi Solar and Solar Integrated 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 Solar Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyi Solar and Solar Integrated.
Diversification Opportunities for Xinyi Solar and Solar Integrated
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xinyi and Solar is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Xinyi Solar Holdings and Solar Integrated Roofing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Integrated Roofing 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 Solar Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Integrated Roofing has no effect on the direction of Xinyi Solar i.e., Xinyi Solar and Solar Integrated go up and down completely randomly.
Pair Corralation between Xinyi Solar and Solar Integrated
Assuming the 90 days horizon Xinyi Solar Holdings is expected to under-perform the Solar Integrated. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xinyi Solar Holdings is 12.48 times less risky than Solar Integrated. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Solar Integrated Roofing is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Solar Integrated Roofing on August 28, 2024 and sell it today you would lose (0.01) from holding Solar Integrated Roofing or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinyi Solar Holdings vs. Solar Integrated Roofing
Performance |
| Timeline |
| Xinyi Solar Holdings |
| Solar Integrated Roofing |
Xinyi Solar and Solar Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinyi Solar and Solar Integrated
The main advantage of trading using opposite Xinyi Solar and Solar Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyi Solar position performs unexpectedly, Solar Integrated 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 Solar Integrated will offset losses from the drop in Solar Integrated's long position.| Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. GCL Poly Energy Holdings | Xinyi Solar vs. Three Sixty Solar |
| Solar Integrated vs. Newhydrogen | Solar Integrated vs. Ascent Solar Technologies, | Solar Integrated vs. TGI Solar Power | Solar Integrated vs. Clear Blue Technologies |
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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