Correlation Between Foxx Development and Dyadic International

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

By analyzing existing cross correlation between Foxx Development Holdings and Dyadic International, you can compare the effects of market volatilities on Foxx Development and Dyadic International 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 Foxx Development with a short position of Dyadic International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foxx Development and Dyadic International.

Diversification Opportunities for Foxx Development and Dyadic International

-0.78

Correlation Coefficient

Foxx Development  Dyadic International

Pay attention - limited upside

The 3 months correlation between Foxx and Dyadic is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Foxx Development Holdings and Dyadic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dyadic International and Foxx Development 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 Foxx Development Holdings are associated (or correlated) with Dyadic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dyadic International has no effect on the direction of Foxx Development i.e., Foxx Development and Dyadic International go up and down completely randomly.

Pair Corralation between Foxx Development and Dyadic International

Given the investment horizon of 90 days Foxx Development Holdings is expected to under-perform the Dyadic International. In addition to that, Foxx Development is 1.55 times more volatile than Dyadic International. It trades about -0.03 of its total potential returns per unit of risk. Dyadic International is currently generating about 0.13 per unit of volatility. If you would invest  105.00  in Dyadic International on October 12, 2024 and sell it today you would earn a total of  60.00  from holding Dyadic International or generate 57.14% return on investment over 90 days.

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

Foxx Development Holdings  vs.  Dyadic International

Foxx Development Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foxx Development Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Dyadic International

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dyadic International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Dyadic International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Foxx Development and Dyadic International

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

The idea behind Foxx Development Holdings and Dyadic International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.