Correlation Between Xavis and Shinsung Delta

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

By analyzing existing cross correlation between Xavis Co and Shinsung Delta Tech, you can compare the effects of market volatilities on Xavis and Shinsung Delta 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 Xavis with a short position of Shinsung Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and Shinsung Delta.

Diversification Opportunities for Xavis and Shinsung Delta

-0.77

Correlation Coefficient

Xavis  Shinsung Delta

Pay attention - limited upside

The 3 months correlation between Xavis and Shinsung is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and Shinsung Delta Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsung Delta Tech and Xavis 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 Xavis Co are associated (or correlated) with Shinsung Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsung Delta Tech has no effect on the direction of Xavis i.e., Xavis and Shinsung Delta go up and down completely randomly.

Pair Corralation between Xavis and Shinsung Delta

Assuming the 90 days trading horizon Xavis is expected to generate 2.83 times less return on investment than Shinsung Delta. But when comparing it to its historical volatility, Xavis Co is 2.55 times less risky than Shinsung Delta. It trades about 0.33 of its potential returns per unit of risk. Shinsung Delta Tech is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  7,080,000  in Shinsung Delta Tech on October 8, 2024 and sell it today you would earn a total of  4,300,000  from holding Shinsung Delta Tech or generate 60.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Xavis Co  vs.  Shinsung Delta Tech

Xavis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xavis Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Shinsung Delta Tech

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shinsung Delta Tech are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shinsung Delta sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xavis and Shinsung Delta

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

The idea behind Xavis Co and Shinsung Delta Tech 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.