Correlation Between Xintec and Cameo Communications

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

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

Diversification Opportunities for Xintec and Cameo Communications

-0.04

Correlation Coefficient

Xintec  Cameo Communications

Good diversification

The 3 months correlation between Xintec and Cameo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Xintec and Cameo Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameo Communications and Xintec 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 Xintec are associated (or correlated) with Cameo Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameo Communications has no effect on the direction of Xintec i.e., Xintec and Cameo Communications go up and down completely randomly.

Pair Corralation between Xintec and Cameo Communications

Assuming the 90 days trading horizon Xintec is expected to generate 1.15 times more return on investment than Cameo Communications. However, Xintec is 1.15 times more volatile than Cameo Communications. It trades about 0.07 of its potential returns per unit of risk. Cameo Communications is currently generating about 0.02 per unit of risk. If you would invest  10,383  in Xintec on October 25, 2024 and sell it today you would earn a total of  10,617  from holding Xintec or generate 102.25% return on investment over 90 days.

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

Xintec  vs.  Cameo Communications

Xintec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xintec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Xintec is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Cameo Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cameo Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Xintec and Cameo Communications

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

The idea behind Xintec and Cameo Communications 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.