Correlation Between Xinhua Winshare and FEMALE HEALTH

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

Diversification Opportunities for Xinhua Winshare and FEMALE HEALTH

-0.18

Correlation Coefficient

Xinhua Winshare  FEMALE HEALTH

Good diversification

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

Pair Corralation between Xinhua Winshare and FEMALE HEALTH

Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 0.32 times more return on investment than FEMALE HEALTH. However, Xinhua Winshare Publishing is 3.09 times less risky than FEMALE HEALTH. It trades about 0.62 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about 0.04 per unit of risk. If you would invest  113.00  in Xinhua Winshare Publishing on September 22, 2024 and sell it today you would earn a total of  26.00  from holding Xinhua Winshare Publishing or generate 23.01% return on investment over 90 days.

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

Xinhua Winshare Publishing  vs.  FEMALE HEALTH

Xinhua Winshare Publ

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xinhua Winshare Publishing are ranked lower than 19 (%) 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.

FEMALE HEALTH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FEMALE HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Xinhua Winshare and FEMALE HEALTH

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

The idea behind Xinhua Winshare Publishing and FEMALE HEALTH 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..