Correlation Between 10X Capital and XPAC Acquisition

Can any of the company-specific risk be diversified away by investing in both 10X Capital and XPAC Acquisition 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 10X Capital and XPAC Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 10X Capital Venture and XPAC Acquisition Corp, you can compare the effects of market volatilities on 10X Capital and XPAC Acquisition 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 10X Capital with a short position of XPAC Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of 10X Capital and XPAC Acquisition.

Diversification Opportunities for 10X Capital and XPAC Acquisition

0.04

Correlation Coefficient

10X Capital  XPAC Acquisition

Significant diversification

The 3 months correlation between 10X and XPAC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding 10X Capital Venture and XPAC Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XPAC Acquisition Corp and 10X Capital 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 10X Capital Venture are associated (or correlated) with XPAC Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XPAC Acquisition Corp has no effect on the direction of 10X Capital i.e., 10X Capital and XPAC Acquisition go up and down completely randomly.

Pair Corralation between 10X Capital and XPAC Acquisition

If you would invest  1,039  in XPAC Acquisition Corp on September 18, 2024 and sell it today you would earn a total of  0.00  from holding XPAC Acquisition Corp or generate 0.0% return on investment over 90 days.

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

10X Capital Venture  vs.  XPAC Acquisition Corp

10X Capital Venture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 10X Capital Venture has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 10X Capital is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

XPAC Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XPAC Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, XPAC Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 10X Capital and XPAC Acquisition

The main advantage of trading using opposite 10X Capital and XPAC Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 10X Capital position performs unexpectedly, XPAC Acquisition 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 XPAC Acquisition will offset losses from the drop in XPAC Acquisition's long position.

The idea behind 10X Capital Venture and XPAC Acquisition 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.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.