Correlation Between Xinyi Solar and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both Xinyi Solar and SolarEdge Technologies 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 SolarEdge Technologies 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 SolarEdge Technologies, you can compare the effects of market volatilities on Xinyi Solar and SolarEdge Technologies 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 SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyi Solar and SolarEdge Technologies.
Diversification Opportunities for Xinyi Solar and SolarEdge Technologies
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xinyi and SolarEdge is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xinyi Solar Holdings and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies 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 SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of Xinyi Solar i.e., Xinyi Solar and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between Xinyi Solar and SolarEdge Technologies
Assuming the 90 days horizon Xinyi Solar is expected to generate 20.19 times less return on investment than SolarEdge Technologies. But when comparing it to its historical volatility, Xinyi Solar Holdings is 1.87 times less risky than SolarEdge Technologies. It trades about 0.01 of its potential returns per unit of risk. SolarEdge Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,295 in SolarEdge Technologies on December 28, 2024 and sell it today you would earn a total of 185.00 from holding SolarEdge Technologies or generate 14.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xinyi Solar Holdings vs. SolarEdge Technologies
Performance |
Timeline |
Xinyi Solar Holdings |
SolarEdge Technologies |
Xinyi Solar and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xinyi Solar and SolarEdge Technologies
The main advantage of trading using opposite Xinyi Solar and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyi Solar position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.Xinyi Solar vs. The Japan Steel | Xinyi Solar vs. LIFEWAY FOODS | Xinyi Solar vs. Fevertree Drinks PLC | Xinyi Solar vs. Veolia Environnement SA |
SolarEdge Technologies vs. ORMAT TECHNOLOGIES | SolarEdge Technologies vs. SOFI TECHNOLOGIES | SolarEdge Technologies vs. Sunny Optical Technology | SolarEdge Technologies vs. USWE SPORTS AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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