Correlation Between Xp and Finnovate Acquisition
Can any of the company-specific risk be diversified away by investing in both Xp and Finnovate Acquisition 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 Xp and Finnovate Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Finnovate Acquisition Corp, you can compare the effects of market volatilities on Xp and Finnovate Acquisition 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 Xp with a short position of Finnovate Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Finnovate Acquisition.
Diversification Opportunities for Xp and Finnovate Acquisition
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xp and Finnovate is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Finnovate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnovate Acquisition and Xp 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 Xp Inc are associated (or correlated) with Finnovate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnovate Acquisition has no effect on the direction of Xp i.e., Xp and Finnovate Acquisition go up and down completely randomly.
Pair Corralation between Xp and Finnovate Acquisition
If you would invest 1,365 in Xp Inc on December 2, 2024 and sell it today you would earn a total of 50.00 from holding Xp Inc or generate 3.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 9.52% |
Values | Daily Returns |
Xp Inc vs. Finnovate Acquisition Corp
Performance |
Timeline |
Xp Inc |
Finnovate Acquisition |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Xp and Finnovate Acquisition Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xp and Finnovate Acquisition
The main advantage of trading using opposite Xp and Finnovate Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, Finnovate Acquisition 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 Finnovate Acquisition will offset losses from the drop in Finnovate Acquisition's long position.Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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