Correlation Between X Financial and Ekiz Kimya

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

Diversification Opportunities for X Financial and Ekiz Kimya

-0.09

Correlation Coefficient

X Financial  Ekiz Kimya

Good diversification

The 3 months correlation between XYF and Ekiz is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and Ekiz Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekiz Kimya Sanayi 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 Ekiz Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekiz Kimya Sanayi has no effect on the direction of X Financial i.e., X Financial and Ekiz Kimya go up and down completely randomly.

Pair Corralation between X Financial and Ekiz Kimya

Considering the 90-day investment horizon X Financial is expected to generate 1.32 times less return on investment than Ekiz Kimya. But when comparing it to its historical volatility, X Financial Class is 1.16 times less risky than Ekiz Kimya. It trades about 0.07 of its potential returns per unit of risk. Ekiz Kimya Sanayi is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,778  in Ekiz Kimya Sanayi on October 4, 2024 and sell it today you would earn a total of  3,862  from holding Ekiz Kimya Sanayi or generate 217.21% return on investment over 90 days.

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

X Financial Class  vs.  Ekiz Kimya Sanayi

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.

Ekiz Kimya Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekiz Kimya Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ekiz Kimya is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with X Financial and Ekiz Kimya

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

The idea behind X Financial Class and Ekiz Kimya Sanayi 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.