Correlation Between Xior Student and Aedifica

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

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

Diversification Opportunities for Xior Student and Aedifica

-0.34

Correlation Coefficient

Xior Student  Aedifica

Very good diversification

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

Pair Corralation between Xior Student and Aedifica

Assuming the 90 days trading horizon Xior Student Housing is expected to under-perform the Aedifica. In addition to that, Xior Student is 1.28 times more volatile than Aedifica. It trades about -0.01 of its total potential returns per unit of risk. Aedifica is currently generating about 0.15 per unit of volatility. If you would invest  5,585  in Aedifica on December 30, 2024 and sell it today you would earn a total of  695.00  from holding Aedifica or generate 12.44% return on investment over 90 days.

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

Xior Student Housing  vs.  Aedifica

Xior Student Housing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xior Student Housing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Xior Student is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Aedifica

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aedifica are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Aedifica may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Xior Student and Aedifica

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

The idea behind Xior Student Housing and Aedifica 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.