Correlation Between Argen X and Xior Student

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

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

Diversification Opportunities for Argen X and Xior Student

-0.83

Correlation Coefficient

Argen X  Xior Student

Pay attention - limited upside

The 3 months correlation between Argen and Xior is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Argen X and Xior Student Housing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xior Student Housing and Argen X 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 Argen X are associated (or correlated) with Xior Student. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xior Student Housing has no effect on the direction of Argen X i.e., Argen X and Xior Student go up and down completely randomly.

Pair Corralation between Argen X and Xior Student

Assuming the 90 days trading horizon Argen X is expected to generate 1.25 times more return on investment than Xior Student. However, Argen X is 1.25 times more volatile than Xior Student Housing. It trades about 0.2 of its potential returns per unit of risk. Xior Student Housing is currently generating about -0.07 per unit of risk. If you would invest  46,810  in Argen X on August 30, 2024 and sell it today you would earn a total of  11,430  from holding Argen X or generate 24.42% return on investment over 90 days.

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

Argen X  vs.  Xior Student Housing

Argen X

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Argen X are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Argen X reported solid returns over the last few months and may actually be approaching a breakup point.

Xior Student Housing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xior Student Housing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Argen X and Xior Student

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

The idea behind Argen X and Xior Student Housing 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 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.