Correlation Between X Financial and JOHNSON SVC
Can any of the company-specific risk be diversified away by investing in both X Financial and JOHNSON SVC 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 X Financial and JOHNSON SVC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Financial Class and JOHNSON SVC LS 10, you can compare the effects of market volatilities on X Financial and JOHNSON SVC 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 X Financial with a short position of JOHNSON SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Financial and JOHNSON SVC.
Diversification Opportunities for X Financial and JOHNSON SVC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XYF and JOHNSON is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and JOHNSON SVC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOHNSON SVC LS and X Financial 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 X Financial Class are associated (or correlated) with JOHNSON SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOHNSON SVC LS has no effect on the direction of X Financial i.e., X Financial and JOHNSON SVC go up and down completely randomly.
Pair Corralation between X Financial and JOHNSON SVC
Considering the 90-day investment horizon X Financial Class is expected to generate 1.53 times more return on investment than JOHNSON SVC. However, X Financial is 1.53 times more volatile than JOHNSON SVC LS 10. It trades about 0.22 of its potential returns per unit of risk. JOHNSON SVC LS 10 is currently generating about -0.1 per unit of risk. If you would invest 708.00 in X Financial Class on October 5, 2024 and sell it today you would earn a total of 133.00 from holding X Financial Class or generate 18.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 85.0% |
Values | Daily Returns |
X Financial Class vs. JOHNSON SVC LS 10
Performance |
Timeline |
X Financial Class |
JOHNSON SVC LS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
X Financial and JOHNSON SVC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with X Financial and JOHNSON SVC
The main advantage of trading using opposite X Financial and JOHNSON SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Financial position performs unexpectedly, JOHNSON SVC 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 JOHNSON SVC will offset losses from the drop in JOHNSON SVC's long position.X Financial vs. LM Funding America | X Financial vs. Nisun International Enterprise | X Financial vs. Qudian Inc | X Financial vs. FinVolution Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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