Correlation Between Xtra Energy and Hypertension Diagnostics

Can any of the company-specific risk be diversified away by investing in both Xtra Energy and Hypertension Diagnostics 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 Xtra Energy and Hypertension Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xtra Energy Corp and Hypertension Diagnostics, you can compare the effects of market volatilities on Xtra Energy and Hypertension Diagnostics 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 Xtra Energy with a short position of Hypertension Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtra Energy and Hypertension Diagnostics.

Diversification Opportunities for Xtra Energy and Hypertension Diagnostics

0.51

Correlation Coefficient

Xtra Energy  Hypertension Diagnostics

Very weak diversification

The 3 months correlation between Xtra and Hypertension is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xtra Energy Corp and Hypertension Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypertension Diagnostics and Xtra Energy 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 Xtra Energy Corp are associated (or correlated) with Hypertension Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypertension Diagnostics has no effect on the direction of Xtra Energy i.e., Xtra Energy and Hypertension Diagnostics go up and down completely randomly.

Pair Corralation between Xtra Energy and Hypertension Diagnostics

If you would invest  18.00  in Xtra Energy Corp on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Xtra Energy Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Xtra Energy Corp  vs.  Hypertension Diagnostics

Xtra Energy Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xtra Energy Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Xtra Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Hypertension Diagnostics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hypertension Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Hypertension Diagnostics is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Xtra Energy and Hypertension Diagnostics

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

The idea behind Xtra Energy Corp and Hypertension Diagnostics 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.