Correlation Between Xavis and Humax
Can any of the company-specific risk be diversified away by investing in both Xavis and Humax 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 Humax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xavis Co and Humax Co, you can compare the effects of market volatilities on Xavis and Humax 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 Humax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and Humax.
Diversification Opportunities for Xavis and Humax
Poor diversification
The 3 months correlation between Xavis and Humax is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and Humax Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax 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 Humax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax has no effect on the direction of Xavis i.e., Xavis and Humax go up and down completely randomly.
Pair Corralation between Xavis and Humax
Assuming the 90 days trading horizon Xavis is expected to generate 2.98 times less return on investment than Humax. But when comparing it to its historical volatility, Xavis Co is 1.56 times less risky than Humax. It trades about 0.11 of its potential returns per unit of risk. Humax Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 119,200 in Humax Co on October 24, 2024 and sell it today you would earn a total of 12,400 from holding Humax Co or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xavis Co vs. Humax Co
Performance |
| Timeline |
| Xavis |
| Humax |
Xavis and Humax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xavis and Humax
The main advantage of trading using opposite Xavis and Humax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xavis position performs unexpectedly, Humax 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 Humax will offset losses from the drop in Humax's long position.| Xavis vs. KakaoBank Corp | Xavis vs. Dgb Financial | Xavis vs. Koryo Credit Information | Xavis vs. Korean Drug 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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