Correlation Between China XD and Worldpay
Can any of the company-specific risk be diversified away by investing in both China XD and Worldpay 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 China XD and Worldpay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China XD Plastics and Worldpay, you can compare the effects of market volatilities on China XD and Worldpay 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 China XD with a short position of Worldpay. Check out your portfolio center. Please also check ongoing floating volatility patterns of China XD and Worldpay.
Diversification Opportunities for China XD and Worldpay
Pay attention - limited upside
The 3 months correlation between China and Worldpay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China XD Plastics and Worldpay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldpay and China XD 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 China XD Plastics are associated (or correlated) with Worldpay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldpay has no effect on the direction of China XD i.e., China XD and Worldpay go up and down completely randomly.
Pair Corralation between China XD and Worldpay
If you would invest 0.38 in China XD Plastics on January 20, 2024 and sell it today you would lose (0.14) from holding China XD Plastics or give up 36.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
China XD Plastics vs. Worldpay
Performance |
| Timeline |
| China XD Plastics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Worldpay |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China XD and Worldpay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China XD and Worldpay
The main advantage of trading using opposite China XD and Worldpay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China XD position performs unexpectedly, Worldpay 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 Worldpay will offset losses from the drop in Worldpay's long position.| China XD vs. Zhihu Inc ADR | China XD vs. Grupo Televisa SAB | China XD vs. ServiceNow | China XD vs. Getty Images Holdings |
| Worldpay vs. Pinterest | Worldpay vs. Weibo Corp | Worldpay vs. HE Equipment Services | Worldpay vs. Loandepot |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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