Correlation Between X Financial and AdTheorent Holding

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

Diversification Opportunities for X Financial and AdTheorent Holding

-0.29

Correlation Coefficient

X Financial  AdTheorent Holding

Very good diversification

The 3 months correlation between XYF and AdTheorent is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and AdTheorent Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdTheorent Holding 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 AdTheorent Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdTheorent Holding has no effect on the direction of X Financial i.e., X Financial and AdTheorent Holding go up and down completely randomly.

Pair Corralation between X Financial and AdTheorent Holding

Considering the 90-day investment horizon X Financial Class is expected to generate 0.91 times more return on investment than AdTheorent Holding. However, X Financial Class is 1.1 times less risky than AdTheorent Holding. It trades about 0.09 of its potential returns per unit of risk. AdTheorent Holding is currently generating about 0.07 per unit of risk. If you would invest  254.00  in X Financial Class on October 5, 2024 and sell it today you would earn a total of  587.00  from holding X Financial Class or generate 231.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.33%
Values	Daily Returns

X Financial Class  vs.  AdTheorent Holding

X Financial Class

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in X Financial Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, X Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AdTheorent Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with X Financial and AdTheorent Holding

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

The idea behind X Financial Class and AdTheorent Holding 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 Stocks Directory module to find actively traded stocks across global markets.