Correlation Between XSpring Capital and G Capital

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

Diversification Opportunities for XSpring Capital and G Capital

0.55

Correlation Coefficient

XSpring Capital  G Capital

Very weak diversification

The 3 months correlation between XSpring and GCAP is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding XSpring Capital Public and G Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Capital 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 G Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Capital Public has no effect on the direction of XSpring Capital i.e., XSpring Capital and G Capital go up and down completely randomly.

Pair Corralation between XSpring Capital and G Capital

Assuming the 90 days trading horizon XSpring Capital Public is expected to under-perform the G Capital. But the stock apears to be less risky and, when comparing its historical volatility, XSpring Capital Public is 24.6 times less risky than G Capital. The stock trades about -0.05 of its potential returns per unit of risk. The G Capital Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  53.00  in G Capital Public on September 3, 2024 and sell it today you would lose (13.00) from holding G Capital Public or give up 24.53% of portfolio value over 90 days.

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

XSpring Capital Public  vs.  G Capital Public

XSpring Capital Public

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in XSpring Capital Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

G Capital Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G Capital Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, G Capital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XSpring Capital and G Capital

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

The idea behind XSpring Capital Public and G Capital 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.