Correlation Between Keli Sensing and Xinhua Winshare

Can any of the company-specific risk be diversified away by investing in both Keli Sensing and Xinhua Winshare 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 Keli Sensing and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Keli Sensing Technology and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Keli Sensing and Xinhua Winshare 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 Keli Sensing with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keli Sensing and Xinhua Winshare.

Diversification Opportunities for Keli Sensing and Xinhua Winshare

-0.06

Correlation Coefficient

Keli Sensing  Xinhua Winshare

Good diversification

The 3 months correlation between Keli and Xinhua is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Keli Sensing Technology and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and Keli Sensing 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 Keli Sensing Technology are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Keli Sensing i.e., Keli Sensing and Xinhua Winshare go up and down completely randomly.

Pair Corralation between Keli Sensing and Xinhua Winshare

Assuming the 90 days trading horizon Keli Sensing Technology is expected to generate 1.97 times more return on investment than Xinhua Winshare. However, Keli Sensing is 1.97 times more volatile than Xinhua Winshare Publishing. It trades about 0.31 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.02 per unit of risk. If you would invest  2,287  in Keli Sensing Technology on September 2, 2024 and sell it today you would earn a total of  2,817  from holding Keli Sensing Technology or generate 123.17% return on investment over 90 days.

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

Keli Sensing Technology  vs.  Xinhua Winshare Publishing

Keli Sensing Technology

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Keli Sensing Technology are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Keli Sensing sustained solid returns over the last few months and may actually be approaching a breakup point.

Xinhua Winshare Publ

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xinhua Winshare Publishing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Xinhua Winshare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Keli Sensing and Xinhua Winshare

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

The idea behind Keli Sensing Technology and Xinhua Winshare Publishing 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.