Correlation Between 159681 and Xiamen CD

Can any of the company-specific risk be diversified away by investing in both 159681 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 159681 and Xiamen CD into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 159681 and Xiamen CD, you can compare the effects of market volatilities on 159681 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 159681 with a short position of Xiamen CD. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Xiamen CD.

Diversification Opportunities for 159681 and Xiamen CD

0.05

Correlation Coefficient

159681  Xiamen CD

Significant diversification

The 3 months correlation between 159681 and Xiamen is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and Xiamen CD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen CD and 159681 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 159681 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 159681 i.e., 159681 and Xiamen CD go up and down completely randomly.

Pair Corralation between 159681 and Xiamen CD

Assuming the 90 days trading horizon 159681 is expected to under-perform the Xiamen CD. But the etf apears to be less risky and, when comparing its historical volatility, 159681 is 1.37 times less risky than Xiamen CD. The etf trades about -0.49 of its potential returns per unit of risk. The Xiamen CD is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  1,002  in Xiamen CD on October 14, 2024 and sell it today you would lose (47.00) from holding Xiamen CD or give up 4.69% of portfolio value over 90 days.

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

159681  vs.  Xiamen CD

159681

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 159681 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF 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 159681 and Xiamen CD

The main advantage of trading using opposite 159681 and Xiamen CD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 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 159681 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.