Correlation Between Harbor Custom and Xinyuan Real

Can any of the company-specific risk be diversified away by investing in both Harbor Custom and Xinyuan Real 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 Harbor Custom and Xinyuan Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harbor Custom Development and Xinyuan Real Estate, you can compare the effects of market volatilities on Harbor Custom and Xinyuan Real 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 Harbor Custom with a short position of Xinyuan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Custom and Xinyuan Real.

Diversification Opportunities for Harbor Custom and Xinyuan Real

-0.46

Correlation Coefficient

Harbor Custom  Xinyuan Real

Very good diversification

The 3 months correlation between Harbor and Xinyuan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Custom Development and Xinyuan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyuan Real Estate and Harbor Custom 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 Harbor Custom Development are associated (or correlated) with Xinyuan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyuan Real Estate has no effect on the direction of Harbor Custom i.e., Harbor Custom and Xinyuan Real go up and down completely randomly.

Pair Corralation between Harbor Custom and Xinyuan Real

If you would invest  513.00  in Harbor Custom Development on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Harbor Custom Development or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Harbor Custom Development  vs.  Xinyuan Real Estate

Harbor Custom Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harbor Custom Development has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Harbor Custom is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Xinyuan Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xinyuan Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Harbor Custom and Xinyuan Real

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

The idea behind Harbor Custom Development and Xinyuan Real Estate 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.