Correlation Between Time Publishing and Xiandai Investment

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

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

Diversification Opportunities for Time Publishing and Xiandai Investment

0.86

Correlation Coefficient

Time Publishing  Xiandai Investment

Very poor diversification

The 3 months correlation between Time and Xiandai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Time Publishing and and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment and Time Publishing 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 Time Publishing and 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 Time Publishing i.e., Time Publishing and Xiandai Investment go up and down completely randomly.

Pair Corralation between Time Publishing and Xiandai Investment

Assuming the 90 days trading horizon Time Publishing and is expected to generate 1.36 times more return on investment than Xiandai Investment. However, Time Publishing is 1.36 times more volatile than Xiandai Investment Co. It trades about -0.05 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about -0.1 per unit of risk. If you would invest  881.00  in Time Publishing and on December 30, 2024 and sell it today you would lose (41.00) from holding Time Publishing and or give up 4.65% of portfolio value over 90 days.

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

Time Publishing and  vs.  Xiandai Investment Co

Time Publishing

Risk-Adjusted Performance

Very Weak

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

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 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 Time Publishing and Xiandai Investment

The main advantage of trading using opposite Time Publishing and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Time Publishing 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 Time Publishing and 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.