Correlation Between Thunder Software and Xinya Electronic

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

By analyzing existing cross correlation between Thunder Software Technology and Xinya Electronic Co, you can compare the effects of market volatilities on Thunder Software and Xinya Electronic 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 Thunder Software with a short position of Xinya Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Software and Xinya Electronic.

Diversification Opportunities for Thunder Software and Xinya Electronic

0.66

Correlation Coefficient

Thunder Software  Xinya Electronic

Poor diversification

The 3 months correlation between Thunder and Xinya is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Software Technology and Xinya Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinya Electronic and Thunder Software 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 Thunder Software Technology are associated (or correlated) with Xinya Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinya Electronic has no effect on the direction of Thunder Software i.e., Thunder Software and Xinya Electronic go up and down completely randomly.

Pair Corralation between Thunder Software and Xinya Electronic

Assuming the 90 days trading horizon Thunder Software Technology is expected to under-perform the Xinya Electronic. In addition to that, Thunder Software is 1.04 times more volatile than Xinya Electronic Co. It trades about -0.01 of its total potential returns per unit of risk. Xinya Electronic Co is currently generating about 0.04 per unit of volatility. If you would invest  941.00  in Xinya Electronic Co on October 4, 2024 and sell it today you would earn a total of  470.00  from holding Xinya Electronic Co or generate 49.95% return on investment over 90 days.

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

Thunder Software Technology  vs.  Xinya Electronic Co

Thunder Software Tec

Risk-Adjusted Performance

0 of 100

Very Weak

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

Xinya Electronic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Thunder Software and Xinya Electronic

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

The idea behind Thunder Software Technology and Xinya Electronic Co 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.