Correlation Between Xavis and DB HiTek
Can any of the company-specific risk be diversified away by investing in both Xavis and DB HiTek 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 Xavis and DB HiTek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xavis Co and DB HiTek Co, you can compare the effects of market volatilities on Xavis and DB HiTek 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 Xavis with a short position of DB HiTek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and DB HiTek.
Diversification Opportunities for Xavis and DB HiTek
Very poor diversification
The 3 months correlation between Xavis and 000990 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and DB HiTek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB HiTek and Xavis 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 Xavis Co are associated (or correlated) with DB HiTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB HiTek has no effect on the direction of Xavis i.e., Xavis and DB HiTek go up and down completely randomly.
Pair Corralation between Xavis and DB HiTek
Assuming the 90 days trading horizon Xavis Co is expected to generate 0.76 times more return on investment than DB HiTek. However, Xavis Co is 1.32 times less risky than DB HiTek. It trades about 0.15 of its potential returns per unit of risk. DB HiTek Co is currently generating about 0.05 per unit of risk. If you would invest 129,100 in Xavis Co on October 23, 2024 and sell it today you would earn a total of 5,700 from holding Xavis Co or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Xavis Co vs. DB HiTek Co
Performance |
| Timeline |
| Xavis |
| DB HiTek |
Xavis and DB HiTek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xavis and DB HiTek
The main advantage of trading using opposite Xavis and DB HiTek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xavis position performs unexpectedly, DB HiTek 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 DB HiTek will offset losses from the drop in DB HiTek's long position.| Xavis vs. Ecoplastic | Xavis vs. Ssangyong Materials Corp | Xavis vs. Sungmoon Electronics Co | Xavis vs. Top Material Co |
| DB HiTek vs. Ilji Technology Co | DB HiTek vs. Ssangyong Information Communication | DB HiTek vs. Koh Young Technology | DB HiTek vs. Guyoung Technology Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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