Correlation Between X Financial and HEXINDO ADIPERKASA

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

Diversification Opportunities for X Financial and HEXINDO ADIPERKASA

-0.46

Correlation Coefficient

X Financial  HEXINDO ADIPERKASA

Very good diversification

The 3 months correlation between XYF and HEXINDO is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and HEXINDO ADIPERKASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXINDO ADIPERKASA has no effect on the direction of X Financial i.e., X Financial and HEXINDO ADIPERKASA go up and down completely randomly.

Pair Corralation between X Financial and HEXINDO ADIPERKASA

Considering the 90-day investment horizon X Financial Class is expected to generate 3.16 times more return on investment than HEXINDO ADIPERKASA. However, X Financial is 3.16 times more volatile than HEXINDO ADIPERKASA. It trades about 0.06 of its potential returns per unit of risk. HEXINDO ADIPERKASA is currently generating about 0.01 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 Against
Strength	Very Weak
Accuracy	99.0%
Values	Daily Returns

X Financial Class  vs.  HEXINDO ADIPERKASA

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.

HEXINDO ADIPERKASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEXINDO ADIPERKASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with X Financial and HEXINDO ADIPERKASA

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

The idea behind X Financial Class and HEXINDO ADIPERKASA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.