Correlation Between ALERION CLEANPOWER and Xinhua Winshare

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

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

Diversification Opportunities for ALERION CLEANPOWER and Xinhua Winshare

0.14

Correlation Coefficient

ALERION CLEANPOWER  Xinhua Winshare

Average diversification

The 3 months correlation between ALERION and Xinhua is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and ALERION CLEANPOWER 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 ALERION CLEANPOWER are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of ALERION CLEANPOWER i.e., ALERION CLEANPOWER and Xinhua Winshare go up and down completely randomly.

Pair Corralation between ALERION CLEANPOWER and Xinhua Winshare

Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to under-perform the Xinhua Winshare. But the stock apears to be less risky and, when comparing its historical volatility, ALERION CLEANPOWER is 1.63 times less risky than Xinhua Winshare. The stock trades about -0.04 of its potential returns per unit of risk. The Xinhua Winshare Publishing is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Xinhua Winshare Publishing on September 14, 2024 and sell it today you would earn a total of  100.00  from holding Xinhua Winshare Publishing or generate 357.14% return on investment over 90 days.

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

ALERION CLEANPOWER  vs.  Xinhua Winshare Publishing

ALERION CLEANPOWER

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ALERION CLEANPOWER are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ALERION CLEANPOWER may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Xinhua Winshare Publ

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xinhua Winshare Publishing are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Xinhua Winshare reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALERION CLEANPOWER and Xinhua Winshare

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

The idea behind ALERION CLEANPOWER and Xinhua Winshare Publishing 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.