Correlation Between Xaar Plc and Beeks Trading

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

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

Diversification Opportunities for Xaar Plc and Beeks Trading

-0.34

Correlation Coefficient

Xaar Plc  Beeks Trading

Very good diversification

The 3 months correlation between Xaar and Beeks is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xaar plc and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading and Xaar Plc 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 Xaar plc are associated (or correlated) with Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Xaar Plc i.e., Xaar Plc and Beeks Trading go up and down completely randomly.

Pair Corralation between Xaar Plc and Beeks Trading

Assuming the 90 days trading horizon Xaar plc is expected to under-perform the Beeks Trading. In addition to that, Xaar Plc is 1.02 times more volatile than Beeks Trading. It trades about -0.04 of its total potential returns per unit of risk. Beeks Trading is currently generating about 0.07 per unit of volatility. If you would invest  12,800  in Beeks Trading on October 10, 2024 and sell it today you would earn a total of  16,100  from holding Beeks Trading or generate 125.78% return on investment over 90 days.

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

Xaar plc  vs.  Beeks Trading

Xaar plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xaar plc 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 Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Beeks Trading

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Beeks Trading are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Beeks Trading may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Xaar Plc and Beeks Trading

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

The idea behind Xaar plc and Beeks Trading 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 Commodity Directory module to find actively traded commodities issued by global exchanges.