Correlation Between Diodes Incorporated and CXApp

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

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

Diversification Opportunities for Diodes Incorporated and CXApp

-0.46

Correlation Coefficient

Diodes Incorporated  CXApp

Very good diversification

The 3 months correlation between Diodes and CXApp is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Diodes Incorporated and CXApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CXApp Inc and Diodes Incorporated 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 Diodes Incorporated are associated (or correlated) with CXApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CXApp Inc has no effect on the direction of Diodes Incorporated i.e., Diodes Incorporated and CXApp go up and down completely randomly.

Pair Corralation between Diodes Incorporated and CXApp

Given the investment horizon of 90 days Diodes Incorporated is expected to generate 0.43 times more return on investment than CXApp. However, Diodes Incorporated is 2.35 times less risky than CXApp. It trades about -0.02 of its potential returns per unit of risk. CXApp Inc is currently generating about -0.03 per unit of risk. If you would invest  6,460  in Diodes Incorporated on October 4, 2024 and sell it today you would lose (329.00) from holding Diodes Incorporated or give up 5.09% of portfolio value over 90 days.

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

Diodes Incorporated  vs.  CXApp Inc

Diodes Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Diodes Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Diodes Incorporated is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 conflicting performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Diodes Incorporated and CXApp

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

The idea behind Diodes Incorporated and CXApp Inc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.