Correlation Between Lecron Energy and Xinjiang Goldwind

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

By analyzing existing cross correlation between Lecron Energy Saving and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Lecron Energy and Xinjiang Goldwind 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 Lecron Energy with a short position of Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lecron Energy and Xinjiang Goldwind.

Diversification Opportunities for Lecron Energy and Xinjiang Goldwind

-0.09

Correlation Coefficient

Lecron Energy  Xinjiang Goldwind

Good diversification

The 3 months correlation between Lecron and Xinjiang is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lecron Energy Saving and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science and Lecron Energy 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 Lecron Energy Saving are associated (or correlated) with Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Lecron Energy i.e., Lecron Energy and Xinjiang Goldwind go up and down completely randomly.

Pair Corralation between Lecron Energy and Xinjiang Goldwind

Assuming the 90 days trading horizon Lecron Energy Saving is expected to under-perform the Xinjiang Goldwind. In addition to that, Lecron Energy is 2.36 times more volatile than Xinjiang Goldwind Science. It trades about -0.09 of its total potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about -0.12 per unit of volatility. If you would invest  1,064  in Xinjiang Goldwind Science on December 25, 2024 and sell it today you would lose (114.00) from holding Xinjiang Goldwind Science or give up 10.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Lecron Energy Saving  vs.  Xinjiang Goldwind Science

Lecron Energy Saving

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lecron Energy Saving 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xinjiang Goldwind Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xinjiang Goldwind Science 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.

Pair Trading with Lecron Energy and Xinjiang Goldwind

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

The idea behind Lecron Energy Saving and Xinjiang Goldwind Science 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..