Correlation Between Foxx Development and Specialized Technology

Can any of the company-specific risk be diversified away by investing in both Foxx Development and Specialized Technology 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 Specialized Technology 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 Specialized Technology Fund, you can compare the effects of market volatilities on Foxx Development and Specialized Technology 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 Specialized Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foxx Development and Specialized Technology.

Diversification Opportunities for Foxx Development and Specialized Technology

-0.17

Correlation Coefficient

Foxx Development  Specialized Technology

Good diversification

The 3 months correlation between Foxx and SPECIALIZED is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Foxx Development Holdings and Specialized Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Specialized Technology 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 Specialized Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Specialized Technology has no effect on the direction of Foxx Development i.e., Foxx Development and Specialized Technology go up and down completely randomly.

Pair Corralation between Foxx Development and Specialized Technology

Given the investment horizon of 90 days Foxx Development Holdings is expected to generate 13.65 times more return on investment than Specialized Technology. However, Foxx Development is 13.65 times more volatile than Specialized Technology Fund. It trades about 0.11 of its potential returns per unit of risk. Specialized Technology Fund is currently generating about -0.19 per unit of risk. If you would invest  320.00  in Foxx Development Holdings on December 4, 2024 and sell it today you would earn a total of  195.00  from holding Foxx Development Holdings or generate 60.94% return on investment over 90 days.

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

Foxx Development Holdings  vs.  Specialized Technology Fund

Foxx Development Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Foxx Development Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Foxx Development showed solid returns over the last few months and may actually be approaching a breakup point.

Specialized Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Specialized Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Foxx Development and Specialized Technology

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

The idea behind Foxx Development Holdings and Specialized Technology Fund 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.