Correlation Between X Financial and Genesis Minerals

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

Diversification Opportunities for X Financial and Genesis Minerals

0.43

Correlation Coefficient

X Financial  Genesis Minerals

Very weak diversification

The 3 months correlation between XYF and Genesis is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and Genesis Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Minerals 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 Genesis Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Minerals has no effect on the direction of X Financial i.e., X Financial and Genesis Minerals go up and down completely randomly.

Pair Corralation between X Financial and Genesis Minerals

Considering the 90-day investment horizon X Financial Class is expected to generate 1.38 times more return on investment than Genesis Minerals. However, X Financial is 1.38 times more volatile than Genesis Minerals. It trades about 0.06 of its potential returns per unit of risk. Genesis Minerals is currently generating about 0.06 per unit of risk. If you would invest  349.00  in X Financial Class on October 4, 2024 and sell it today you would earn a total of  484.00  from holding X Financial Class or generate 138.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.4%
Values	Daily Returns

X Financial Class  vs.  Genesis Minerals

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.

Genesis Minerals

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Minerals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Genesis Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with X Financial and Genesis Minerals

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

The idea behind X Financial Class and Genesis Minerals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.