Correlation Between Xcelmobility and Dragon Capital

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

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

Diversification Opportunities for Xcelmobility and Dragon Capital

0.0

Correlation Coefficient

Xcelmobility  Dragon Capital

Pay attention - limited upside

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

Pair Corralation between Xcelmobility and Dragon Capital

If you would invest  0.05  in Dragon Capital Grp on October 3, 2024 and sell it today you would lose (0.03) from holding Dragon Capital Grp or give up 60.0% of portfolio value over 90 days.

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

Xcelmobility  vs.  Dragon Capital Grp

Xcelmobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xcelmobility has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Xcelmobility is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Dragon Capital Grp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dragon Capital Grp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Dragon Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xcelmobility and Dragon Capital

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

The idea behind Xcelmobility and Dragon Capital Grp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.