Correlation Between Definitive Healthcare and Xiabuxiabu Catering

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

By analyzing existing cross correlation between Definitive Healthcare Corp and Xiabuxiabu Catering Management, you can compare the effects of market volatilities on Definitive Healthcare and Xiabuxiabu Catering 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 Definitive Healthcare with a short position of Xiabuxiabu Catering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and Xiabuxiabu Catering.

Diversification Opportunities for Definitive Healthcare and Xiabuxiabu Catering

-0.08

Correlation Coefficient

Definitive Healthcare  Xiabuxiabu Catering

Good diversification

The 3 months correlation between Definitive and Xiabuxiabu is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Xiabuxiabu Catering Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiabuxiabu Catering and Definitive Healthcare 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 Definitive Healthcare Corp are associated (or correlated) with Xiabuxiabu Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiabuxiabu Catering has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Xiabuxiabu Catering go up and down completely randomly.

Pair Corralation between Definitive Healthcare and Xiabuxiabu Catering

Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to under-perform the Xiabuxiabu Catering. In addition to that, Definitive Healthcare is 1.57 times more volatile than Xiabuxiabu Catering Management. It trades about -0.19 of its total potential returns per unit of risk. Xiabuxiabu Catering Management is currently generating about 0.22 per unit of volatility. If you would invest  14.00  in Xiabuxiabu Catering Management on October 10, 2024 and sell it today you would earn a total of  1.00  from holding Xiabuxiabu Catering Management or generate 7.14% return on investment over 90 days.

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

Definitive Healthcare Corp  vs.  Xiabuxiabu Catering Management

Definitive Healthcare

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Definitive Healthcare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Definitive Healthcare is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Xiabuxiabu Catering

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xiabuxiabu Catering Management are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Xiabuxiabu Catering may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Definitive Healthcare and Xiabuxiabu Catering

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

The idea behind Definitive Healthcare Corp and Xiabuxiabu Catering Management 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.