Correlation Between Xinhua Winshare and Hugo Boss

Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Hugo Boss 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 Hugo Boss 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 Hugo Boss AG, you can compare the effects of market volatilities on Xinhua Winshare and Hugo Boss 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 Hugo Boss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Hugo Boss.

Diversification Opportunities for Xinhua Winshare and Hugo Boss

0.08

Correlation Coefficient

Xinhua Winshare  Hugo Boss

Significant diversification

The 3 months correlation between Xinhua and Hugo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Hugo Boss AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hugo Boss AG 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 Hugo Boss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hugo Boss AG has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Hugo Boss go up and down completely randomly.

Pair Corralation between Xinhua Winshare and Hugo Boss

Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 0.8 times more return on investment than Hugo Boss. However, Xinhua Winshare Publishing is 1.25 times less risky than Hugo Boss. It trades about 0.67 of its potential returns per unit of risk. Hugo Boss AG is currently generating about 0.42 per unit of risk. If you would invest  120.00  in Xinhua Winshare Publishing on October 5, 2024 and sell it today you would earn a total of  24.00  from holding Xinhua Winshare Publishing or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Xinhua Winshare Publishing  vs.  Hugo Boss AG

Xinhua Winshare Publ

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Xinhua Winshare Publishing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Xinhua Winshare reported solid returns over the last few months and may actually be approaching a breakup point.

Hugo Boss AG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hugo Boss AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Hugo Boss may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Xinhua Winshare and Hugo Boss

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

The idea behind Xinhua Winshare Publishing and Hugo Boss AG 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.