Correlation Between Xavis and Kmw
Can any of the company-specific risk be diversified away by investing in both Xavis and Kmw 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 Kmw into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xavis Co and Kmw Inc, you can compare the effects of market volatilities on Xavis and Kmw 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 Kmw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and Kmw.
Diversification Opportunities for Xavis and Kmw
Very good diversification
The 3 months correlation between Xavis and Kmw is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and Kmw Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmw Inc 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 Kmw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmw Inc has no effect on the direction of Xavis i.e., Xavis and Kmw go up and down completely randomly.
Pair Corralation between Xavis and Kmw
Assuming the 90 days trading horizon Xavis Co is expected to under-perform the Kmw. But the stock apears to be less risky and, when comparing its historical volatility, Xavis Co is 1.47 times less risky than Kmw. The stock trades about -0.48 of its potential returns per unit of risk. The Kmw Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 779,000 in Kmw Inc on September 3, 2024 and sell it today you would earn a total of 66,000 from holding Kmw Inc or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xavis Co vs. Kmw Inc
Performance |
| Timeline |
| Xavis |
| Kmw Inc |
Xavis and Kmw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xavis and Kmw
The main advantage of trading using opposite Xavis and Kmw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xavis position performs unexpectedly, Kmw 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 Kmw will offset losses from the drop in Kmw's long position.| Xavis vs. DSC Investment | Xavis vs. SK Chemicals Co | Xavis vs. Golden Bridge Investment | Xavis vs. Woori Technology Investment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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