Correlation Between Xinhua Winshare and UNIDOC HEALTH

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

Diversification Opportunities for Xinhua Winshare and UNIDOC HEALTH

-0.41

Correlation Coefficient

Xinhua Winshare  UNIDOC HEALTH

Very good diversification

The 3 months correlation between Xinhua and UNIDOC is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and UNIDOC HEALTH P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIDOC HEALTH P 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 UNIDOC HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIDOC HEALTH P has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and UNIDOC HEALTH go up and down completely randomly.

Pair Corralation between Xinhua Winshare and UNIDOC HEALTH

Assuming the 90 days horizon Xinhua Winshare is expected to generate 1.53 times less return on investment than UNIDOC HEALTH. But when comparing it to its historical volatility, Xinhua Winshare Publishing is 1.63 times less risky than UNIDOC HEALTH. It trades about 0.21 of its potential returns per unit of risk. UNIDOC HEALTH P is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  31.00  in UNIDOC HEALTH P on October 12, 2024 and sell it today you would earn a total of  4.00  from holding UNIDOC HEALTH P or generate 12.9% return on investment over 90 days.

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

Xinhua Winshare Publishing  vs.  UNIDOC HEALTH P

Xinhua Winshare Publ

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xinhua Winshare Publishing are ranked lower than 15 (%) 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.

UNIDOC HEALTH P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIDOC HEALTH P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Xinhua Winshare and UNIDOC HEALTH

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

The idea behind Xinhua Winshare Publishing and UNIDOC HEALTH P 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.