Correlation Between Xiamen Insight and Easyhome New

Can any of the company-specific risk be diversified away by investing in both Xiamen Insight and Easyhome New 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 Xiamen Insight and Easyhome New into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xiamen Insight Investment and Easyhome New Retail, you can compare the effects of market volatilities on Xiamen Insight and Easyhome New 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 Xiamen Insight with a short position of Easyhome New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Insight and Easyhome New.

Diversification Opportunities for Xiamen Insight and Easyhome New

-0.38

Correlation Coefficient

Xiamen Insight  Easyhome New

Very good diversification

The 3 months correlation between Xiamen and Easyhome is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Insight Investment and Easyhome New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easyhome New Retail and Xiamen Insight 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 Xiamen Insight Investment are associated (or correlated) with Easyhome New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easyhome New Retail has no effect on the direction of Xiamen Insight i.e., Xiamen Insight and Easyhome New go up and down completely randomly.

Pair Corralation between Xiamen Insight and Easyhome New

Assuming the 90 days trading horizon Xiamen Insight Investment is expected to under-perform the Easyhome New. But the stock apears to be less risky and, when comparing its historical volatility, Xiamen Insight Investment is 1.38 times less risky than Easyhome New. The stock trades about -0.09 of its potential returns per unit of risk. The Easyhome New Retail is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  264.00  in Easyhome New Retail on October 11, 2024 and sell it today you would earn a total of  155.00  from holding Easyhome New Retail or generate 58.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Xiamen Insight Investment  vs.  Easyhome New Retail

Xiamen Insight Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiamen Insight Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Easyhome New Retail

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Easyhome New Retail are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Easyhome New sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xiamen Insight and Easyhome New

The main advantage of trading using opposite Xiamen Insight and Easyhome New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Insight position performs unexpectedly, Easyhome New 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 Easyhome New will offset losses from the drop in Easyhome New's long position.

The idea behind Xiamen Insight Investment and Easyhome New Retail pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.