Correlation Between Xinhua Winshare and TERADATA

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

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

Diversification Opportunities for Xinhua Winshare and TERADATA

0.67

Correlation Coefficient

Xinhua Winshare  TERADATA

Poor diversification

The 3 months correlation between Xinhua and TERADATA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and TERADATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADATA and Xinhua Winshare 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 Xinhua Winshare Publishing are associated (or correlated) with TERADATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADATA has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and TERADATA go up and down completely randomly.

Pair Corralation between Xinhua Winshare and TERADATA

Assuming the 90 days horizon Xinhua Winshare Publishing is expected to under-perform the TERADATA. In addition to that, Xinhua Winshare is 2.53 times more volatile than TERADATA. It trades about -0.16 of its total potential returns per unit of risk. TERADATA is currently generating about -0.03 per unit of volatility. If you would invest  3,080  in TERADATA on October 27, 2024 and sell it today you would lose (20.00) from holding TERADATA or give up 0.65% of portfolio value over 90 days.

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

Xinhua Winshare Publishing  vs.  TERADATA

Xinhua Winshare Publ

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xinhua Winshare Publishing are ranked lower than 8 (%) 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.

TERADATA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TERADATA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, TERADATA is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Xinhua Winshare and TERADATA

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

The idea behind Xinhua Winshare Publishing and TERADATA 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.