Correlation Between X Legend and Cayenne Entertainment
Can any of the company-specific risk be diversified away by investing in both X Legend and Cayenne Entertainment 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 X Legend and Cayenne Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Legend Entertainment Co and Cayenne Entertainment Technology, you can compare the effects of market volatilities on X Legend and Cayenne Entertainment 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 X Legend with a short position of Cayenne Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and Cayenne Entertainment.
Diversification Opportunities for X Legend and Cayenne Entertainment
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 4994 and Cayenne is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co and Cayenne Entertainment Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayenne Entertainment and X Legend 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 X Legend Entertainment Co are associated (or correlated) with Cayenne Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayenne Entertainment has no effect on the direction of X Legend i.e., X Legend and Cayenne Entertainment go up and down completely randomly.
Pair Corralation between X Legend and Cayenne Entertainment
Assuming the 90 days trading horizon X Legend Entertainment Co is expected to generate 0.21 times more return on investment than Cayenne Entertainment. However, X Legend Entertainment Co is 4.85 times less risky than Cayenne Entertainment. It trades about 0.25 of its potential returns per unit of risk. Cayenne Entertainment Technology is currently generating about 0.04 per unit of risk. If you would invest 10,150 in X Legend Entertainment Co on August 24, 2024 and sell it today you would earn a total of 500.00 from holding X Legend Entertainment Co or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Legend Entertainment Co vs. Cayenne Entertainment Technolo
Performance |
| Timeline |
| X Legend Entertainment |
| Cayenne Entertainment |
X Legend and Cayenne Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Legend and Cayenne Entertainment
The main advantage of trading using opposite X Legend and Cayenne Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Legend position performs unexpectedly, Cayenne Entertainment 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 Cayenne Entertainment will offset losses from the drop in Cayenne Entertainment's long position.| X Legend vs. Chunghwa Telecom Co | X Legend vs. Far EasTone Telecommunications | X Legend vs. CTBC Financial Holding | X Legend vs. Fubon Financial Holding |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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