Correlation Between X Legend and Dynapack International

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

By analyzing existing cross correlation between X Legend Entertainment Co and Dynapack International Technology, you can compare the effects of market volatilities on X Legend and Dynapack International 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 X Legend with a short position of Dynapack International. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and Dynapack International.

Diversification Opportunities for X Legend and Dynapack International

0.24

Correlation Coefficient

X Legend  Dynapack International

Modest diversification

The 3 months correlation between 4994 and Dynapack is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co and Dynapack International Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynapack International and X Legend 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 X Legend Entertainment Co are associated (or correlated) with Dynapack International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynapack International has no effect on the direction of X Legend i.e., X Legend and Dynapack International go up and down completely randomly.

Pair Corralation between X Legend and Dynapack International

Assuming the 90 days trading horizon X Legend Entertainment Co is expected to generate 0.38 times more return on investment than Dynapack International. However, X Legend Entertainment Co is 2.61 times less risky than Dynapack International. It trades about -0.03 of its potential returns per unit of risk. Dynapack International Technology is currently generating about -0.06 per unit of risk. If you would invest  10,350  in X Legend Entertainment Co on December 30, 2024 and sell it today you would lose (300.00) from holding X Legend Entertainment Co or give up 2.9% of portfolio value over 90 days.

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

X Legend Entertainment Co  vs.  Dynapack International Technol

X Legend Entertainment

Risk-Adjusted Performance

Very Weak

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

Dynapack International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynapack International Technology 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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with X Legend and Dynapack International

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

The idea behind X Legend Entertainment Co and Dynapack International Technology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.