Correlation Between Asia Precision and XSpring Capital

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

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

Diversification Opportunities for Asia Precision and XSpring Capital

0.65

Correlation Coefficient

Asia Precision  XSpring Capital

Poor diversification

The 3 months correlation between Asia and XSpring is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Asia Precision Public and XSpring Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XSpring Capital Public and Asia Precision 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 Asia Precision Public are associated (or correlated) with XSpring Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XSpring Capital Public has no effect on the direction of Asia Precision i.e., Asia Precision and XSpring Capital go up and down completely randomly.

Pair Corralation between Asia Precision and XSpring Capital

Assuming the 90 days trading horizon Asia Precision Public is expected to under-perform the XSpring Capital. In addition to that, Asia Precision is 2.11 times more volatile than XSpring Capital Public. It trades about -0.07 of its total potential returns per unit of risk. XSpring Capital Public is currently generating about -0.08 per unit of volatility. If you would invest  91.00  in XSpring Capital Public on December 29, 2024 and sell it today you would lose (11.00) from holding XSpring Capital Public or give up 12.09% of portfolio value over 90 days.

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

Asia Precision Public  vs.  XSpring Capital Public

Asia Precision Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Precision Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

XSpring Capital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days XSpring Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Asia Precision and XSpring Capital

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

The idea behind Asia Precision Public and XSpring Capital Public 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.