Correlation Between Greenland Acquisition and Xinjiang Goldwind

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

By analyzing existing cross correlation between Greenland Acquisition Corp and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Greenland Acquisition and Xinjiang Goldwind 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 Greenland Acquisition with a short position of Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenland Acquisition and Xinjiang Goldwind.

Diversification Opportunities for Greenland Acquisition and Xinjiang Goldwind

-0.05

Correlation Coefficient

Greenland Acquisition  Xinjiang Goldwind

Good diversification

The 3 months correlation between Greenland and Xinjiang is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Greenland Acquisition Corp and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science and Greenland Acquisition 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 Greenland Acquisition Corp are associated (or correlated) with Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Greenland Acquisition i.e., Greenland Acquisition and Xinjiang Goldwind go up and down completely randomly.

Pair Corralation between Greenland Acquisition and Xinjiang Goldwind

Given the investment horizon of 90 days Greenland Acquisition is expected to generate 1.17 times less return on investment than Xinjiang Goldwind. In addition to that, Greenland Acquisition is 1.02 times more volatile than Xinjiang Goldwind Science. It trades about 0.02 of its total potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about 0.03 per unit of volatility. If you would invest  89.00  in Xinjiang Goldwind Science on September 26, 2024 and sell it today you would lose (1.00) from holding Xinjiang Goldwind Science or give up 1.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.37%
Values	Daily Returns

Greenland Acquisition Corp  vs.  Xinjiang Goldwind Science

Greenland Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenland Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Xinjiang Goldwind Science

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xinjiang Goldwind Science are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Xinjiang Goldwind reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greenland Acquisition and Xinjiang Goldwind

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

The idea behind Greenland Acquisition Corp and Xinjiang Goldwind Science 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.