Correlation Between XOX Technology and Top Glove
Can any of the company-specific risk be diversified away by investing in both XOX Technology and Top Glove 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 XOX Technology and Top Glove into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XOX Technology Bhd and Top Glove, you can compare the effects of market volatilities on XOX Technology and Top Glove 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 XOX Technology with a short position of Top Glove. Check out your portfolio center. Please also check ongoing floating volatility patterns of XOX Technology and Top Glove.
Diversification Opportunities for XOX Technology and Top Glove
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XOX and Top is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding XOX Technology Bhd and Top Glove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Glove and XOX Technology 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 XOX Technology Bhd are associated (or correlated) with Top Glove. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Glove has no effect on the direction of XOX Technology i.e., XOX Technology and Top Glove go up and down completely randomly.
Pair Corralation between XOX Technology and Top Glove
Assuming the 90 days trading horizon XOX Technology is expected to generate 1.02 times less return on investment than Top Glove. In addition to that, XOX Technology is 1.65 times more volatile than Top Glove. It trades about 0.04 of its total potential returns per unit of risk. Top Glove is currently generating about 0.07 per unit of volatility. If you would invest 97.00 in Top Glove on November 2, 2024 and sell it today you would earn a total of 23.00 from holding Top Glove or generate 23.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XOX Technology Bhd vs. Top Glove
Performance |
| Timeline |
| XOX Technology Bhd |
| Top Glove |
XOX Technology and Top Glove Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XOX Technology and Top Glove
The main advantage of trading using opposite XOX Technology and Top Glove positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XOX Technology position performs unexpectedly, Top Glove 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 Top Glove will offset losses from the drop in Top Glove's long position.| XOX Technology vs. Datasonic Group Bhd | XOX Technology vs. Awanbiru Technology Bhd | XOX Technology vs. Dataprep Holdings Bhd | XOX Technology vs. Systech Bhd |
| Top Glove vs. Berjaya Food Bhd | Top Glove vs. Carlsberg Brewery Malaysia | Top Glove vs. Kawan Food Bhd | Top Glove vs. Malayan Banking Bhd |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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