Correlation Between Xinhua Winshare and Cars
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Cars 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 Cars 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 Cars Inc, you can compare the effects of market volatilities on Xinhua Winshare and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Cars.
Diversification Opportunities for Xinhua Winshare and Cars
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinhua and Cars is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Cars go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Cars
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 0.52 times more return on investment than Cars. However, Xinhua Winshare Publishing is 1.92 times less risky than Cars. It trades about -0.11 of its potential returns per unit of risk. Cars Inc is currently generating about -0.13 per unit of risk. If you would invest 143.00 in Xinhua Winshare Publishing on December 27, 2024 and sell it today you would lose (21.00) from holding Xinhua Winshare Publishing or give up 14.69% 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. Cars Inc
Performance |
Timeline |
Xinhua Winshare Publ |
Cars Inc |
Xinhua Winshare and Cars Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xinhua Winshare and Cars
The main advantage of trading using opposite Xinhua Winshare and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.Xinhua Winshare vs. DEVRY EDUCATION GRP | Xinhua Winshare vs. BORR DRILLING NEW | Xinhua Winshare vs. EMBARK EDUCATION LTD | Xinhua Winshare vs. CENTURIA OFFICE REIT |
Cars vs. PRECISION DRILLING P | Cars vs. Perdoceo Education | Cars vs. VIVA WINE GROUP | Cars vs. United Insurance Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |