Correlation Between Gushen and Xtra Energy

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

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

Diversification Opportunities for Gushen and Xtra Energy

0.0

Correlation Coefficient

Gushen  Xtra Energy

Pay attention - limited upside

The 3 months correlation between Gushen and Xtra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gushen Inc and Xtra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtra Energy Corp and Gushen 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 Gushen Inc are associated (or correlated) with Xtra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtra Energy Corp has no effect on the direction of Gushen i.e., Gushen and Xtra Energy go up and down completely randomly.

Pair Corralation between Gushen and Xtra Energy

If you would invest  17.00  in Xtra Energy Corp on December 1, 2024 and sell it today you would earn a total of  5.00  from holding Xtra Energy Corp or generate 29.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gushen Inc  vs.  Xtra Energy Corp

Gushen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gushen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Gushen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Xtra Energy Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xtra Energy Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Xtra Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gushen and Xtra Energy

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

The idea behind Gushen Inc and Xtra Energy 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.

Check out your portfolio center.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.