Correlation Between X Financial and Swan Hedged
Can any of the company-specific risk be diversified away by investing in both X Financial and Swan Hedged 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 Swan Hedged 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 Swan Hedged Equity, you can compare the effects of market volatilities on X Financial and Swan Hedged 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 Swan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Financial and Swan Hedged.
Diversification Opportunities for X Financial and Swan Hedged
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XYF and Swan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and Swan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Hedged Equity 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 Swan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Hedged Equity has no effect on the direction of X Financial i.e., X Financial and Swan Hedged go up and down completely randomly.
Pair Corralation between X Financial and Swan Hedged
Considering the 90-day investment horizon X Financial Class is expected to generate 6.83 times more return on investment than Swan Hedged. However, X Financial is 6.83 times more volatile than Swan Hedged Equity. It trades about 0.16 of its potential returns per unit of risk. Swan Hedged Equity is currently generating about 0.05 per unit of risk. If you would invest 412.00 in X Financial Class on October 4, 2024 and sell it today you would earn a total of 421.00 from holding X Financial Class or generate 102.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
X Financial Class vs. Swan Hedged Equity
Performance |
Timeline |
X Financial Class |
Swan Hedged Equity |
X Financial and Swan Hedged Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with X Financial and Swan Hedged
The main advantage of trading using opposite X Financial and Swan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Financial position performs unexpectedly, Swan Hedged 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 Swan Hedged will offset losses from the drop in Swan Hedged'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 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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