Correlation Between Xinyi Glass and Ibstock Plc

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

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

Diversification Opportunities for Xinyi Glass and Ibstock Plc

0.0

Correlation Coefficient

Xinyi Glass  Ibstock Plc

Pay attention - limited upside

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

Pair Corralation between Xinyi Glass and Ibstock Plc

If you would invest  1,799  in Xinyi Glass Holdings on September 4, 2024 and sell it today you would earn a total of  286.00  from holding Xinyi Glass Holdings or generate 15.9% return on investment over 90 days.

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

Xinyi Glass Holdings  vs.  Ibstock Plc

Xinyi Glass Holdings

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xinyi Glass Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Xinyi Glass showed solid returns over the last few months and may actually be approaching a breakup point.

Ibstock Plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Xinyi Glass and Ibstock Plc

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

The idea behind Xinyi Glass Holdings and Ibstock Plc 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 Transaction History module to view history of all your transactions and understand their impact on performance.