Correlation Between Xavis and TSE
Can any of the company-specific risk be diversified away by investing in both Xavis and TSE 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 TSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xavis Co and TSE Co, you can compare the effects of market volatilities on Xavis and TSE 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 TSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and TSE.
Diversification Opportunities for Xavis and TSE
Very poor diversification
The 3 months correlation between Xavis and TSE is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and TSE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSE Co 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 TSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSE Co has no effect on the direction of Xavis i.e., Xavis and TSE go up and down completely randomly.
Pair Corralation between Xavis and TSE
Assuming the 90 days trading horizon Xavis is expected to generate 8.48 times less return on investment than TSE. In addition to that, Xavis is 1.1 times more volatile than TSE Co. It trades about 0.0 of its total potential returns per unit of risk. TSE Co is currently generating about 0.02 per unit of volatility. If you would invest 4,116,348 in TSE Co on October 9, 2024 and sell it today you would earn a total of 313,652 from holding TSE Co or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xavis Co vs. TSE Co
Performance |
| Timeline |
| Xavis |
| TSE Co |
Xavis and TSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xavis and TSE
The main advantage of trading using opposite Xavis and TSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xavis position performs unexpectedly, TSE 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 TSE will offset losses from the drop in TSE's long position.| Xavis vs. Shinhan Inverse Silver | Xavis vs. Lotte Data Communication | Xavis vs. Seoul Food Industrial | Xavis vs. Sejong Telecom |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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