Correlation Between Westone Information and Xiandai Investment
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By analyzing existing cross correlation between Westone Information Industry and Xiandai Investment Co, you can compare the effects of market volatilities on Westone Information and Xiandai Investment 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 Westone Information with a short position of Xiandai Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westone Information and Xiandai Investment.
Diversification Opportunities for Westone Information and Xiandai Investment
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Westone and Xiandai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Westone Information Industry and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment and Westone Information 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 Westone Information Industry are associated (or correlated) with Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of Westone Information i.e., Westone Information and Xiandai Investment go up and down completely randomly.
Pair Corralation between Westone Information and Xiandai Investment
Assuming the 90 days trading horizon Westone Information Industry is expected to generate 1.47 times more return on investment than Xiandai Investment. However, Westone Information is 1.47 times more volatile than Xiandai Investment Co. It trades about 0.2 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about 0.22 per unit of risk. If you would invest 1,196 in Westone Information Industry on September 8, 2024 and sell it today you would earn a total of 609.00 from holding Westone Information Industry or generate 50.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Westone Information Industry vs. Xiandai Investment Co
Performance |
Timeline |
Westone Information |
Xiandai Investment |
Westone Information and Xiandai Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Westone Information and Xiandai Investment
The main advantage of trading using opposite Westone Information and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westone Information position performs unexpectedly, Xiandai Investment 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 Xiandai Investment will offset losses from the drop in Xiandai Investment's long position.Westone Information vs. 159681 | Westone Information vs. 159005 | Westone Information vs. Loctek Ergonomic Technology | Westone Information vs. 516220 |
Xiandai Investment vs. Biwin Storage Technology | Xiandai Investment vs. PetroChina Co Ltd | Xiandai Investment vs. Industrial and Commercial | Xiandai Investment vs. China Construction Bank |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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