Correlation Between XSpring Capital and Dental Public

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

Diversification Opportunities for XSpring Capital and Dental Public

0.77

Correlation Coefficient

XSpring Capital  Dental Public

Poor diversification

The 3 months correlation between XSpring and Dental is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding XSpring Capital Public and Dental Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dental Public 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 Dental Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dental Public has no effect on the direction of XSpring Capital i.e., XSpring Capital and Dental Public go up and down completely randomly.

Pair Corralation between XSpring Capital and Dental Public

Assuming the 90 days trading horizon XSpring Capital Public is expected to generate 1.54 times more return on investment than Dental Public. However, XSpring Capital is 1.54 times more volatile than Dental Public. It trades about 0.01 of its potential returns per unit of risk. Dental Public is currently generating about -0.46 per unit of risk. If you would invest  90.00  in XSpring Capital Public on October 12, 2024 and sell it today you would earn a total of  0.00  from holding XSpring Capital Public or generate 0.0% return on investment over 90 days.

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

XSpring Capital Public  vs.  Dental Public

XSpring Capital Public

Risk-Adjusted Performance

0 of 100

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 quite persistent technical and fundamental indicators, XSpring Capital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Dental Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dental Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with XSpring Capital and Dental Public

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

The idea behind XSpring Capital Public and Dental Public 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.