Correlation Between Xilam Animation and Maisons Du

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

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

Diversification Opportunities for Xilam Animation and Maisons Du

0.15

Correlation Coefficient

Xilam Animation  Maisons Du

Average diversification

The 3 months correlation between Xilam and Maisons is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Xilam Animation and Maisons du Monde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maisons du Monde and Xilam Animation 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 Xilam Animation are associated (or correlated) with Maisons Du. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maisons du Monde has no effect on the direction of Xilam Animation i.e., Xilam Animation and Maisons Du go up and down completely randomly.

Pair Corralation between Xilam Animation and Maisons Du

Assuming the 90 days trading horizon Xilam Animation is expected to under-perform the Maisons Du. But the stock apears to be less risky and, when comparing its historical volatility, Xilam Animation is 1.1 times less risky than Maisons Du. The stock trades about -0.06 of its potential returns per unit of risk. The Maisons du Monde is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  519.00  in Maisons du Monde on September 28, 2024 and sell it today you would lose (96.00) from holding Maisons du Monde or give up 18.5% of portfolio value over 90 days.

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

Xilam Animation  vs.  Maisons du Monde

Xilam Animation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xilam Animation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Maisons du Monde

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maisons du Monde are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Maisons Du may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Xilam Animation and Maisons Du

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

The idea behind Xilam Animation and Maisons du Monde 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.