Correlation Between XSpring Capital and Asian Insulators

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

By analyzing existing cross correlation between XSpring Capital Public and Asian Insulators PCL, you can compare the effects of market volatilities on XSpring Capital and Asian Insulators 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 XSpring Capital with a short position of Asian Insulators. Check out your portfolio center. Please also check ongoing floating volatility patterns of XSpring Capital and Asian Insulators.

Diversification Opportunities for XSpring Capital and Asian Insulators

-0.38

Correlation Coefficient

XSpring Capital  Asian Insulators

Very good diversification

The 3 months correlation between XSpring and Asian is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding XSpring Capital Public and Asian Insulators PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Insulators PCL and XSpring Capital 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 XSpring Capital Public are associated (or correlated) with Asian Insulators. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Insulators PCL has no effect on the direction of XSpring Capital i.e., XSpring Capital and Asian Insulators go up and down completely randomly.

Pair Corralation between XSpring Capital and Asian Insulators

Assuming the 90 days trading horizon XSpring Capital Public is expected to under-perform the Asian Insulators. But the stock apears to be less risky and, when comparing its historical volatility, XSpring Capital Public is 1.34 times less risky than Asian Insulators. The stock trades about -0.08 of its potential returns per unit of risk. The Asian Insulators PCL is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  349.00  in Asian Insulators PCL on December 27, 2024 and sell it today you would lose (9.00) from holding Asian Insulators PCL or give up 2.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

XSpring Capital Public  vs.  Asian Insulators PCL

XSpring Capital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days XSpring Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Asian Insulators PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asian Insulators PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Asian Insulators is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with XSpring Capital and Asian Insulators

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

The idea behind XSpring Capital Public and Asian Insulators PCL 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.