Correlation Between Data International and Xintec

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

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

Diversification Opportunities for Data International and Xintec

0.8

Correlation Coefficient

Data International  Xintec

Very poor diversification

The 3 months correlation between Data and Xintec is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Data International Co and Xintec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintec and Data International 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 Data International Co are associated (or correlated) with Xintec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xintec has no effect on the direction of Data International i.e., Data International and Xintec go up and down completely randomly.

Pair Corralation between Data International and Xintec

Assuming the 90 days trading horizon Data International Co is expected to under-perform the Xintec. In addition to that, Data International is 1.82 times more volatile than Xintec. It trades about -0.41 of its total potential returns per unit of risk. Xintec is currently generating about -0.16 per unit of volatility. If you would invest  20,400  in Xintec on October 8, 2024 and sell it today you would lose (1,050) from holding Xintec or give up 5.15% of portfolio value over 90 days.

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

Data International Co  vs.  Xintec

Data International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Data International Co 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.

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 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 Data International and Xintec

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

The idea behind Data International Co and Xintec 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.