Correlation Between X Financial and Nestle India
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By analyzing existing cross correlation between X Financial Class and Nestle India Limited, you can compare the effects of market volatilities on X Financial and Nestle India 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 Nestle India. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Financial and Nestle India.
Diversification Opportunities for X Financial and Nestle India
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between XYF and Nestle is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and Nestle India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nestle India Limited 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 Nestle India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nestle India Limited has no effect on the direction of X Financial i.e., X Financial and Nestle India go up and down completely randomly.
Pair Corralation between X Financial and Nestle India
Considering the 90-day investment horizon X Financial is expected to generate 11.23 times less return on investment than Nestle India. But when comparing it to its historical volatility, X Financial Class is 16.33 times less risky than Nestle India. It trades about 0.09 of its potential returns per unit of risk. Nestle India Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 176,428 in Nestle India Limited on October 5, 2024 and sell it today you would earn a total of 43,592 from holding Nestle India Limited or generate 24.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.02% |
Values | Daily Returns |
X Financial Class vs. Nestle India Limited
Performance |
Timeline |
X Financial Class |
Nestle India Limited |
X Financial and Nestle India Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with X Financial and Nestle India
The main advantage of trading using opposite X Financial and Nestle India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Financial position performs unexpectedly, Nestle India 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 Nestle India will offset losses from the drop in Nestle India'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 |
Nestle India vs. Bharatiya Global Infomedia | Nestle India vs. Shemaroo Entertainment Limited | Nestle India vs. Ortel Communications Limited | Nestle India vs. One 97 Communications |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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