Correlation Between XAC Automation and Chainqui Construction

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

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

Diversification Opportunities for XAC Automation and Chainqui Construction

-0.15

Correlation Coefficient

XAC Automation  Chainqui Construction

Good diversification

The 3 months correlation between XAC and Chainqui is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding XAC Automation and Chainqui Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainqui Construction and XAC Automation 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 XAC Automation are associated (or correlated) with Chainqui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainqui Construction has no effect on the direction of XAC Automation i.e., XAC Automation and Chainqui Construction go up and down completely randomly.

Pair Corralation between XAC Automation and Chainqui Construction

Assuming the 90 days trading horizon XAC Automation is expected to under-perform the Chainqui Construction. But the stock apears to be less risky and, when comparing its historical volatility, XAC Automation is 1.84 times less risky than Chainqui Construction. The stock trades about -0.28 of its potential returns per unit of risk. The Chainqui Construction Development is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,680  in Chainqui Construction Development on September 15, 2024 and sell it today you would lose (5.00) from holding Chainqui Construction Development or give up 0.3% of portfolio value over 90 days.

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

XAC Automation  vs.  Chainqui Construction Developm

XAC Automation

Risk-Adjusted Performance

0 of 100

Very Weak

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

Chainqui Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chainqui Construction Development 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with XAC Automation and Chainqui Construction

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

The idea behind XAC Automation and Chainqui Construction Development 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.