Correlation Between Xinyi Glass and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Xinyi Glass and Anhui Conch 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 Glass and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinyi Glass Holdings and Anhui Conch Cement, you can compare the effects of market volatilities on Xinyi Glass and Anhui Conch 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 Glass with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyi Glass and Anhui Conch.
Diversification Opportunities for Xinyi Glass and Anhui Conch
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinyi and Anhui is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Xinyi Glass Holdings and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and Xinyi Glass 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 Glass Holdings are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of Xinyi Glass i.e., Xinyi Glass and Anhui Conch go up and down completely randomly.
Pair Corralation between Xinyi Glass and Anhui Conch
Assuming the 90 days horizon Xinyi Glass Holdings is expected to generate 2.83 times more return on investment than Anhui Conch. However, Xinyi Glass is 2.83 times more volatile than Anhui Conch Cement. It trades about 0.07 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.04 per unit of risk. If you would invest 65.00 in Xinyi Glass Holdings on October 26, 2024 and sell it today you would earn a total of 28.00 from holding Xinyi Glass Holdings or generate 43.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Xinyi Glass Holdings vs. Anhui Conch Cement
Performance |
| Timeline |
| Xinyi Glass Holdings |
| Anhui Conch Cement |
Xinyi Glass and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinyi Glass and Anhui Conch
The main advantage of trading using opposite Xinyi Glass and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyi Glass position performs unexpectedly, Anhui Conch 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 Anhui Conch will offset losses from the drop in Anhui Conch's long position.| Xinyi Glass vs. Anhui Conch Cement | Xinyi Glass vs. CEMEX SAB de | Xinyi Glass vs. CEMATRIX | Xinyi Glass vs. Anhui Conch Cement |
| Anhui Conch vs. Buzzi Unicem SpA | Anhui Conch vs. Wienerberger Baustoffindustrie | Anhui Conch vs. Lafargeholcim Ltd ADR | Anhui Conch vs. HeidelbergCement AG ADR |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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