Correlation Between Xai and GRIN

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

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

Diversification Opportunities for Xai and GRIN

0.97

Correlation Coefficient

Xai  GRIN

Almost no diversification

The 3 months correlation between Xai and GRIN is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Xai and GRIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIN and Xai 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 Xai are associated (or correlated) with GRIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIN has no effect on the direction of Xai i.e., Xai and GRIN go up and down completely randomly.

Pair Corralation between Xai and GRIN

Assuming the 90 days trading horizon Xai is expected to under-perform the GRIN. In addition to that, Xai is 1.18 times more volatile than GRIN. It trades about -0.22 of its total potential returns per unit of risk. GRIN is currently generating about -0.12 per unit of volatility. If you would invest  3.97  in GRIN on November 27, 2024 and sell it today you would lose (1.94) from holding GRIN or give up 48.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Xai  vs.  GRIN

Xai

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xai has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's forward indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Xai shareholders.

GRIN

Risk-Adjusted Performance

Very Weak

Over the last 90 days GRIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for GRIN shareholders.

Pair Trading with Xai and GRIN

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

The idea behind Xai and GRIN 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.