Correlation Between Xometry and ABIO Old

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

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

Diversification Opportunities for Xometry and ABIO Old

-0.1

Correlation Coefficient

Xometry  ABIO Old

Good diversification

The 3 months correlation between Xometry and ABIO is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Xometry and ABIO Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABIO Old and Xometry 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 Xometry are associated (or correlated) with ABIO Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABIO Old has no effect on the direction of Xometry i.e., Xometry and ABIO Old go up and down completely randomly.

Pair Corralation between Xometry and ABIO Old

Given the investment horizon of 90 days Xometry is expected to generate 0.28 times more return on investment than ABIO Old. However, Xometry is 3.54 times less risky than ABIO Old. It trades about 0.15 of its potential returns per unit of risk. ABIO Old is currently generating about -0.14 per unit of risk. If you would invest  1,254  in Xometry on October 13, 2024 and sell it today you would earn a total of  2,100  from holding Xometry or generate 167.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	37.76%
Values	Daily Returns

Xometry  vs.  ABIO Old

Xometry

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xometry are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Xometry reported solid returns over the last few months and may actually be approaching a breakup point.

ABIO Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABIO Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, ABIO Old is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Xometry and ABIO Old

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

The idea behind Xometry and ABIO Old 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.