Correlation Between XAI Octagon and Ellsworth Growth

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

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

Diversification Opportunities for XAI Octagon and Ellsworth Growth

-0.53

Correlation Coefficient

XAI Octagon  Ellsworth Growth

Excellent diversification

The 3 months correlation between XAI and Ellsworth is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Ellsworth Growth and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellsworth Growth and XAI Octagon 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 Octagon Floating are associated (or correlated) with Ellsworth Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellsworth Growth has no effect on the direction of XAI Octagon i.e., XAI Octagon and Ellsworth Growth go up and down completely randomly.

Pair Corralation between XAI Octagon and Ellsworth Growth

Assuming the 90 days trading horizon XAI Octagon Floating is expected to generate 0.18 times more return on investment than Ellsworth Growth. However, XAI Octagon Floating is 5.44 times less risky than Ellsworth Growth. It trades about 0.06 of its potential returns per unit of risk. Ellsworth Growth and is currently generating about -0.18 per unit of risk. If you would invest  2,515  in XAI Octagon Floating on September 29, 2024 and sell it today you would earn a total of  10.00  from holding XAI Octagon Floating or generate 0.4% return on investment over 90 days.

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

XAI Octagon Floating  vs.  Ellsworth Growth and

XAI Octagon Floating

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XAI Octagon Floating are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, XAI Octagon is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Ellsworth Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ellsworth Growth and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Ellsworth Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with XAI Octagon and Ellsworth Growth

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

The idea behind XAI Octagon Floating and Ellsworth Growth and 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.