Correlation Between Addcn Technology and Xxentria Technology

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

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

Diversification Opportunities for Addcn Technology and Xxentria Technology

0.63

Correlation Coefficient

Addcn Technology  Xxentria Technology

Poor diversification

The 3 months correlation between Addcn and Xxentria is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Addcn Technology Co and Xxentria Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xxentria Technology and Addcn Technology 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 Addcn Technology Co are associated (or correlated) with Xxentria Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xxentria Technology has no effect on the direction of Addcn Technology i.e., Addcn Technology and Xxentria Technology go up and down completely randomly.

Pair Corralation between Addcn Technology and Xxentria Technology

Assuming the 90 days trading horizon Addcn Technology is expected to generate 5.36 times less return on investment than Xxentria Technology. But when comparing it to its historical volatility, Addcn Technology Co is 2.38 times less risky than Xxentria Technology. It trades about 0.06 of its potential returns per unit of risk. Xxentria Technology Materials is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5,650  in Xxentria Technology Materials on December 11, 2024 and sell it today you would earn a total of  510.00  from holding Xxentria Technology Materials or generate 9.03% return on investment over 90 days.

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

Addcn Technology Co  vs.  Xxentria Technology Materials

Addcn Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Addcn Technology Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Addcn Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Xxentria Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xxentria Technology Materials are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Xxentria Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Addcn Technology and Xxentria Technology

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

The idea behind Addcn Technology Co and Xxentria Technology Materials 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.