Correlation Between SunHydrogen and Xinyi Solar

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

By analyzing existing cross correlation between SunHydrogen and Xinyi Solar Holdings, you can compare the effects of market volatilities on SunHydrogen and Xinyi Solar 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 SunHydrogen with a short position of Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunHydrogen and Xinyi Solar.

Diversification Opportunities for SunHydrogen and Xinyi Solar

0.18

Correlation Coefficient

SunHydrogen  Xinyi Solar

Average diversification

The 3 months correlation between SunHydrogen and Xinyi is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SunHydrogen and Xinyi Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Solar Holdings and SunHydrogen 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 SunHydrogen are associated (or correlated) with Xinyi Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Solar Holdings has no effect on the direction of SunHydrogen i.e., SunHydrogen and Xinyi Solar go up and down completely randomly.

Pair Corralation between SunHydrogen and Xinyi Solar

Given the investment horizon of 90 days SunHydrogen is expected to under-perform the Xinyi Solar. In addition to that, SunHydrogen is 1.13 times more volatile than Xinyi Solar Holdings. It trades about -0.03 of its total potential returns per unit of risk. Xinyi Solar Holdings is currently generating about 0.07 per unit of volatility. If you would invest  38.00  in Xinyi Solar Holdings on September 15, 2024 and sell it today you would earn a total of  7.00  from holding Xinyi Solar Holdings or generate 18.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

SunHydrogen  vs.  Xinyi Solar Holdings

SunHydrogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SunHydrogen has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Xinyi Solar Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xinyi Solar Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Xinyi Solar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SunHydrogen and Xinyi Solar

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

The idea behind SunHydrogen and Xinyi Solar Holdings 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.