Correlation Between Anker Innovations and Xiandai Investment

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

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

Diversification Opportunities for Anker Innovations and Xiandai Investment

-0.27

Correlation Coefficient

Anker Innovations  Xiandai Investment

Very good diversification

The 3 months correlation between Anker and Xiandai is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Anker Innovations Technology and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment and Anker Innovations 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 Anker Innovations Technology are associated (or correlated) with Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of Anker Innovations i.e., Anker Innovations and Xiandai Investment go up and down completely randomly.

Pair Corralation between Anker Innovations and Xiandai Investment

Assuming the 90 days trading horizon Anker Innovations Technology is expected to generate 2.42 times more return on investment than Xiandai Investment. However, Anker Innovations is 2.42 times more volatile than Xiandai Investment Co. It trades about 0.06 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about -0.08 per unit of risk. If you would invest  9,538  in Anker Innovations Technology on December 25, 2024 and sell it today you would earn a total of  761.00  from holding Anker Innovations Technology or generate 7.98% return on investment over 90 days.

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

Anker Innovations Technology  vs.  Xiandai Investment Co

Anker Innovations

Risk-Adjusted Performance

Modest

Over the last 90 days Anker Innovations Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Anker Innovations may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Xiandai Investment

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Anker Innovations and Xiandai Investment

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

The idea behind Anker Innovations Technology and Xiandai Investment 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.