Correlation Between Xavis and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both Xavis and UJU Electronics 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 UJU Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xavis Co and UJU Electronics Co, you can compare the effects of market volatilities on Xavis and UJU Electronics 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 UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and UJU Electronics.
Diversification Opportunities for Xavis and UJU Electronics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xavis and UJU is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics 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 UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Xavis i.e., Xavis and UJU Electronics go up and down completely randomly.
Pair Corralation between Xavis and UJU Electronics
Assuming the 90 days trading horizon Xavis Co is expected to under-perform the UJU Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Xavis Co is 1.17 times less risky than UJU Electronics. The stock trades about -0.35 of its potential returns per unit of risk. The UJU Electronics Co is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,595,000 in UJU Electronics Co on September 2, 2024 and sell it today you would lose (302,000) from holding UJU Electronics Co or give up 18.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xavis Co vs. UJU Electronics Co
Performance |
| Timeline |
| Xavis |
| UJU Electronics |
Xavis and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xavis and UJU Electronics
The main advantage of trading using opposite Xavis and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xavis position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| Xavis vs. AurosTechnology | Xavis vs. Puloon Technology | Xavis vs. GS Retail Co | Xavis vs. ITM Semiconductor Co |
| UJU Electronics vs. Dongsin Engineering Construction | UJU Electronics vs. Doosan Fuel Cell | UJU Electronics vs. Daishin Balance 1 | UJU Electronics vs. Total Soft Bank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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