Correlation Between Xizi Clean and Xiamen CD

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

By analyzing existing cross correlation between Xizi Clean Energy and Xiamen CD, you can compare the effects of market volatilities on Xizi Clean and Xiamen CD 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 Xizi Clean with a short position of Xiamen CD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xizi Clean and Xiamen CD.

Diversification Opportunities for Xizi Clean and Xiamen CD

0.0

Correlation Coefficient

Xizi Clean  Xiamen CD

Pay attention - limited upside

The 3 months correlation between Xizi and Xiamen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xizi Clean Energy and Xiamen CD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen CD and Xizi Clean 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 Xizi Clean Energy are associated (or correlated) with Xiamen CD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen CD has no effect on the direction of Xizi Clean i.e., Xizi Clean and Xiamen CD go up and down completely randomly.

Pair Corralation between Xizi Clean and Xiamen CD

If you would invest (100.00) in Xiamen CD on October 4, 2024 and sell it today you would earn a total of  100.00  from holding Xiamen CD or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Xizi Clean Energy  vs.  Xiamen CD

Xizi Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xizi Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Xiamen CD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiamen CD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Xiamen CD is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xizi Clean and Xiamen CD

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

The idea behind Xizi Clean Energy and Xiamen CD 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.