Correlation Between Harvest Fund and Xizi Clean

Can any of the company-specific risk be diversified away by investing in both Harvest Fund and Xizi Clean 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 Harvest Fund and Xizi Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harvest Fund Management and Xizi Clean Energy, you can compare the effects of market volatilities on Harvest Fund and Xizi Clean 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 Harvest Fund with a short position of Xizi Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Fund and Xizi Clean.

Diversification Opportunities for Harvest Fund and Xizi Clean

-0.48

Correlation Coefficient

Harvest Fund  Xizi Clean

Very good diversification

The 3 months correlation between Harvest and Xizi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Fund Management and Xizi Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xizi Clean Energy and Harvest Fund 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 Harvest Fund Management are associated (or correlated) with Xizi Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xizi Clean Energy has no effect on the direction of Harvest Fund i.e., Harvest Fund and Xizi Clean go up and down completely randomly.

Pair Corralation between Harvest Fund and Xizi Clean

Assuming the 90 days trading horizon Harvest Fund is expected to generate 278.5 times less return on investment than Xizi Clean. But when comparing it to its historical volatility, Harvest Fund Management is 5.26 times less risky than Xizi Clean. It trades about 0.0 of its potential returns per unit of risk. Xizi Clean Energy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  940.00  in Xizi Clean Energy on September 12, 2024 and sell it today you would earn a total of  242.00  from holding Xizi Clean Energy or generate 25.74% return on investment over 90 days.

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

Harvest Fund Management  vs.  Xizi Clean Energy

Harvest Fund Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvest Fund Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Harvest Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Xizi Clean Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xizi Clean Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xizi Clean sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harvest Fund and Xizi Clean

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

The idea behind Harvest Fund Management and Xizi Clean Energy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.