Correlation Between CXApp and Danavation Technologies

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

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

Diversification Opportunities for CXApp and Danavation Technologies

0.02

Correlation Coefficient

CXApp  Danavation Technologies

Significant diversification

The 3 months correlation between CXApp and Danavation is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CXApp Inc and Danavation Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danavation Technologies and CXApp 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 CXApp Inc are associated (or correlated) with Danavation Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danavation Technologies has no effect on the direction of CXApp i.e., CXApp and Danavation Technologies go up and down completely randomly.

Pair Corralation between CXApp and Danavation Technologies

Assuming the 90 days horizon CXApp is expected to generate 193.45 times less return on investment than Danavation Technologies. But when comparing it to its historical volatility, CXApp Inc is 17.53 times less risky than Danavation Technologies. It trades about 0.03 of its potential returns per unit of risk. Danavation Technologies Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Danavation Technologies Corp on September 25, 2024 and sell it today you would earn a total of  0.17  from holding Danavation Technologies Corp or generate 566.67% return on investment over 90 days.

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

CXApp Inc  vs.  Danavation Technologies Corp

CXApp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Danavation Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Danavation Technologies Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Danavation Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CXApp and Danavation Technologies

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

The idea behind CXApp Inc and Danavation Technologies Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.