Correlation Between Adbri and Xinyi Glass

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

By analyzing existing cross correlation between Adbri Limited and Xinyi Glass Holdings, you can compare the effects of market volatilities on Adbri and Xinyi Glass 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 Adbri with a short position of Xinyi Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adbri and Xinyi Glass.

Diversification Opportunities for Adbri and Xinyi Glass

0.0

Correlation Coefficient

Adbri  Xinyi Glass

Pay attention - limited upside

The 3 months correlation between Adbri and Xinyi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adbri Limited and Xinyi Glass Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Glass Holdings and Adbri 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 Adbri Limited are associated (or correlated) with Xinyi Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Glass Holdings has no effect on the direction of Adbri i.e., Adbri and Xinyi Glass go up and down completely randomly.

Pair Corralation between Adbri and Xinyi Glass

If you would invest  1,786  in Xinyi Glass Holdings on September 3, 2024 and sell it today you would earn a total of  218.00  from holding Xinyi Glass Holdings or generate 12.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Adbri Limited  vs.  Xinyi Glass Holdings

Adbri Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adbri Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Adbri is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Xinyi Glass Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xinyi Glass Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Xinyi Glass showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adbri and Xinyi Glass

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

The idea behind Adbri Limited and Xinyi Glass Holdings 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.