Correlation Between X Financial and Xiangpiaopiao Food

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

Diversification Opportunities for X Financial and Xiangpiaopiao Food

0.4

Correlation Coefficient

X Financial  Xiangpiaopiao Food

Very weak diversification

The 3 months correlation between XYF and Xiangpiaopiao is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and Xiangpiaopiao Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangpiaopiao Food 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 Xiangpiaopiao Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangpiaopiao Food has no effect on the direction of X Financial i.e., X Financial and Xiangpiaopiao Food go up and down completely randomly.

Pair Corralation between X Financial and Xiangpiaopiao Food

Considering the 90-day investment horizon X Financial Class is expected to generate 1.05 times more return on investment than Xiangpiaopiao Food. However, X Financial is 1.05 times more volatile than Xiangpiaopiao Food Co. It trades about 0.08 of its potential returns per unit of risk. Xiangpiaopiao Food Co is currently generating about 0.02 per unit of risk. If you would invest  395.00  in X Financial Class on October 4, 2024 and sell it today you would earn a total of  446.00  from holding X Financial Class or generate 112.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.77%
Values	Daily Returns

X Financial Class  vs.  Xiangpiaopiao Food Co

X Financial Class

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in X Financial Class are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, X Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Xiangpiaopiao Food

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xiangpiaopiao Food Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xiangpiaopiao Food sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X Financial and Xiangpiaopiao Food

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

The idea behind X Financial Class and Xiangpiaopiao Food Co 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.