Correlation Between Xxentria Technology and Tacheng Real

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

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

Diversification Opportunities for Xxentria Technology and Tacheng Real

-0.4

Correlation Coefficient

Xxentria Technology  Tacheng Real

Very good diversification

The 3 months correlation between Xxentria and Tacheng is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xxentria Technology Materials and Tacheng Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tacheng Real Estate and Xxentria 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 Xxentria Technology Materials are associated (or correlated) with Tacheng Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tacheng Real Estate has no effect on the direction of Xxentria Technology i.e., Xxentria Technology and Tacheng Real go up and down completely randomly.

Pair Corralation between Xxentria Technology and Tacheng Real

Assuming the 90 days trading horizon Xxentria Technology Materials is expected to generate 0.94 times more return on investment than Tacheng Real. However, Xxentria Technology Materials is 1.06 times less risky than Tacheng Real. It trades about 0.01 of its potential returns per unit of risk. Tacheng Real Estate is currently generating about -0.04 per unit of risk. If you would invest  5,482  in Xxentria Technology Materials on September 20, 2024 and sell it today you would earn a total of  8.00  from holding Xxentria Technology Materials or generate 0.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Xxentria Technology Materials  vs.  Tacheng Real Estate

Xxentria Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xxentria Technology Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Tacheng Real Estate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tacheng Real Estate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Tacheng Real 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 Xxentria Technology and Tacheng Real

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

The idea behind Xxentria Technology Materials and Tacheng Real Estate 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.