Correlation Between ABM Industries and YXTCOM GROUP

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

By analyzing existing cross correlation between ABM Industries Incorporated and YXTCOM GROUP HOLDING, you can compare the effects of market volatilities on ABM Industries and YXTCOM GROUP 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 ABM Industries with a short position of YXTCOM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABM Industries and YXTCOM GROUP.

Diversification Opportunities for ABM Industries and YXTCOM GROUP

-0.07

Correlation Coefficient

ABM Industries  YXTCOM GROUP

Good diversification

The 3 months correlation between ABM and YXTCOM is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ABM Industries Incorporated and YXTCOM GROUP HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YXTCOM GROUP HOLDING and ABM Industries 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 ABM Industries Incorporated are associated (or correlated) with YXTCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YXTCOM GROUP HOLDING has no effect on the direction of ABM Industries i.e., ABM Industries and YXTCOM GROUP go up and down completely randomly.

Pair Corralation between ABM Industries and YXTCOM GROUP

Considering the 90-day investment horizon ABM Industries Incorporated is expected to under-perform the YXTCOM GROUP. But the stock apears to be less risky and, when comparing its historical volatility, ABM Industries Incorporated is 3.04 times less risky than YXTCOM GROUP. The stock trades about -0.22 of its potential returns per unit of risk. The YXTCOM GROUP HOLDING is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  213.00  in YXTCOM GROUP HOLDING on October 14, 2024 and sell it today you would earn a total of  22.00  from holding YXTCOM GROUP HOLDING or generate 10.33% return on investment over 90 days.

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

ABM Industries Incorporated  vs.  YXTCOM GROUP HOLDING

ABM Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABM Industries Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, ABM Industries is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

YXTCOM GROUP HOLDING

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YXTCOM GROUP HOLDING are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, YXTCOM GROUP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ABM Industries and YXTCOM GROUP

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

The idea behind ABM Industries Incorporated and YXTCOM GROUP HOLDING 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.