Correlation Between Xinjiang Goldwind and Destination

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

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

Diversification Opportunities for Xinjiang Goldwind and Destination

-0.33

Correlation Coefficient

Xinjiang Goldwind  Destination

Very good diversification

The 3 months correlation between Xinjiang and Destination is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Goldwind Science and Destination XL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destination XL Group and Xinjiang Goldwind 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 Xinjiang Goldwind Science are associated (or correlated) with Destination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destination XL Group has no effect on the direction of Xinjiang Goldwind i.e., Xinjiang Goldwind and Destination go up and down completely randomly.

Pair Corralation between Xinjiang Goldwind and Destination

Assuming the 90 days horizon Xinjiang Goldwind Science is expected to under-perform the Destination. In addition to that, Xinjiang Goldwind is 1.22 times more volatile than Destination XL Group. It trades about -0.05 of its total potential returns per unit of risk. Destination XL Group is currently generating about -0.01 per unit of volatility. If you would invest  489.00  in Destination XL Group on January 25, 2024 and sell it today you would lose (156.00) from holding Destination XL Group or give up 31.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.53%
Values	Daily Returns

Xinjiang Goldwind Science  vs.  Destination XL Group

Xinjiang Goldwind Science

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xinjiang Goldwind Science are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Xinjiang Goldwind is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Destination XL Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Destination XL Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Xinjiang Goldwind and Destination

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

The idea behind Xinjiang Goldwind Science and Destination XL Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.