Correlation Between Xp and Goldenstone Acquisition

Can any of the company-specific risk be diversified away by investing in both Xp and Goldenstone 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 Goldenstone 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 Goldenstone Acquisition Limited, you can compare the effects of market volatilities on Xp and Goldenstone 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 Goldenstone Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Goldenstone Acquisition.

Diversification Opportunities for Xp and Goldenstone Acquisition

0.22

Correlation Coefficient

Xp  Goldenstone Acquisition

Modest diversification

The 3 months correlation between Xp and Goldenstone is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Goldenstone Acquisition Limite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldenstone 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 Goldenstone Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldenstone Acquisition has no effect on the direction of Xp i.e., Xp and Goldenstone Acquisition go up and down completely randomly.

Pair Corralation between Xp and Goldenstone Acquisition

Allowing for the 90-day total investment horizon Xp is expected to generate 6.58 times less return on investment than Goldenstone Acquisition. But when comparing it to its historical volatility, Xp Inc is 4.65 times less risky than Goldenstone Acquisition. It trades about 0.06 of its potential returns per unit of risk. Goldenstone Acquisition Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Goldenstone Acquisition Limited on December 2, 2024 and sell it today you would earn a total of  2.00  from holding Goldenstone Acquisition Limited or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	45.9%
Values	Daily Returns

Xp Inc  vs.  Goldenstone Acquisition Limite

Xp Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xp Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Xp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Goldenstone Acquisition

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldenstone Acquisition Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Goldenstone Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xp and Goldenstone Acquisition

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

The idea behind Xp Inc and Goldenstone Acquisition Limited 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.