Correlation Between Xiabuxiabu Catering and World Oil

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

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

Diversification Opportunities for Xiabuxiabu Catering and World Oil

0.68

Correlation Coefficient

Xiabuxiabu Catering  World Oil

Poor diversification

The 3 months correlation between Xiabuxiabu and World is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Xiabuxiabu Catering Management and World Oil Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Oil Group and Xiabuxiabu Catering 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 Xiabuxiabu Catering Management are associated (or correlated) with World Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Oil Group has no effect on the direction of Xiabuxiabu Catering i.e., Xiabuxiabu Catering and World Oil go up and down completely randomly.

Pair Corralation between Xiabuxiabu Catering and World Oil

If you would invest  12.00  in Xiabuxiabu Catering Management on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Xiabuxiabu Catering Management or generate 0.0% return on investment over 90 days.

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

Xiabuxiabu Catering Management  vs.  World Oil Group

Xiabuxiabu Catering

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xiabuxiabu Catering Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

World Oil Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days World Oil Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Xiabuxiabu Catering and World Oil

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

The idea behind Xiabuxiabu Catering Management and World Oil Group 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.

Check out your portfolio center.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.