Correlation Between Laser Photonics and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Laser Photonics 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 Laser Photonics and Xinjiang Goldwind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laser Photonics and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Laser Photonics 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 Laser Photonics with a short position of Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laser Photonics and Xinjiang Goldwind.
Diversification Opportunities for Laser Photonics and Xinjiang Goldwind
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Laser and Xinjiang is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Laser Photonics 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 Laser Photonics 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 Laser Photonics 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 Laser Photonics i.e., Laser Photonics and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Laser Photonics and Xinjiang Goldwind
Given the investment horizon of 90 days Laser Photonics is expected to generate 1.86 times more return on investment than Xinjiang Goldwind. However, Laser Photonics is 1.86 times more volatile than Xinjiang Goldwind Science. It trades about 0.07 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about 0.03 per unit of risk. If you would invest 214.00 in Laser Photonics on September 26, 2024 and sell it today you would earn a total of 335.00 from holding Laser Photonics or generate 156.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 71.37% |
Values | Daily Returns |
Laser Photonics vs. Xinjiang Goldwind Science
Performance |
Timeline |
Laser Photonics |
Xinjiang Goldwind Science |
Laser Photonics and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Laser Photonics and Xinjiang Goldwind
The main advantage of trading using opposite Laser Photonics and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laser Photonics 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.Laser Photonics vs. Nuburu Inc | Laser Photonics vs. JE Cleantech Holdings | Laser Photonics vs. Reelcause | Laser Photonics vs. Shapeways Holdings, Common |
Xinjiang Goldwind vs. Shapeways Holdings, Common | Xinjiang Goldwind vs. JE Cleantech Holdings | Xinjiang Goldwind vs. Greenland Acquisition Corp | Xinjiang Goldwind vs. Laser Photonics |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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