Correlation Between Spring Airlines and Xizi Clean

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Can any of the company-specific risk be diversified away by investing in both Spring Airlines and Xizi Clean 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 Spring Airlines and Xizi Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Airlines Co and Xizi Clean Energy, you can compare the effects of market volatilities on Spring Airlines and Xizi Clean 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 Spring Airlines with a short position of Xizi Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Airlines and Xizi Clean.

Diversification Opportunities for Spring Airlines and Xizi Clean

-0.04
  Correlation Coefficient

Good diversification

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

Pair Corralation between Spring Airlines and Xizi Clean

Assuming the 90 days trading horizon Spring Airlines is expected to generate 7.59 times less return on investment than Xizi Clean. But when comparing it to its historical volatility, Spring Airlines Co is 1.67 times less risky than Xizi Clean. It trades about 0.01 of its potential returns per unit of risk. Xizi Clean Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,183  in Xizi Clean Energy on October 22, 2024 and sell it today you would earn a total of  59.00  from holding Xizi Clean Energy or generate 4.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Spring Airlines Co  vs.  Xizi Clean Energy

 Performance 
       Timeline  
Spring Airlines 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days Spring Airlines Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Spring Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Xizi Clean Energy 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Xizi Clean Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xizi Clean may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Spring Airlines and Xizi Clean Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Spring Airlines and Xizi Clean

The main advantage of trading using opposite Spring Airlines and Xizi Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Airlines position performs unexpectedly, Xizi Clean 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 Xizi Clean will offset losses from the drop in Xizi Clean's long position.
The idea behind Spring Airlines Co and Xizi Clean Energy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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