Correlation Between Xander International and Coretronic

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

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

Diversification Opportunities for Xander International and Coretronic

0.14

Correlation Coefficient

Xander International  Coretronic

Average diversification

The 3 months correlation between Xander and Coretronic is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Xander International and Coretronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coretronic and Xander 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 Xander International are associated (or correlated) with Coretronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coretronic has no effect on the direction of Xander International i.e., Xander International and Coretronic go up and down completely randomly.

Pair Corralation between Xander International and Coretronic

Assuming the 90 days trading horizon Xander International is expected to generate 1.13 times more return on investment than Coretronic. However, Xander International is 1.13 times more volatile than Coretronic. It trades about 0.12 of its potential returns per unit of risk. Coretronic is currently generating about 0.01 per unit of risk. If you would invest  2,025  in Xander International on September 16, 2024 and sell it today you would earn a total of  435.00  from holding Xander International or generate 21.48% return on investment over 90 days.

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

Xander International  vs.  Coretronic

Xander International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xander International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Xander International showed solid returns over the last few months and may actually be approaching a breakup point.

Coretronic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Xander International and Coretronic

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

The idea behind Xander International and Coretronic 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.