Correlation Between X Legend and Addcn Technology
Can any of the company-specific risk be diversified away by investing in both X Legend and Addcn Technology 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 Addcn Technology 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 Addcn Technology Co, you can compare the effects of market volatilities on X Legend and Addcn Technology 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 Addcn Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and Addcn Technology.
Diversification Opportunities for X Legend and Addcn Technology
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 4994 and Addcn is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co and Addcn Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addcn Technology 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 Addcn Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addcn Technology has no effect on the direction of X Legend i.e., X Legend and Addcn Technology go up and down completely randomly.
Pair Corralation between X Legend and Addcn Technology
Assuming the 90 days trading horizon X Legend Entertainment Co is expected to generate 1.81 times more return on investment than Addcn Technology. However, X Legend is 1.81 times more volatile than Addcn Technology Co. It trades about 0.43 of its potential returns per unit of risk. Addcn Technology Co is currently generating about -0.11 per unit of risk. If you would invest 10,050 in X Legend Entertainment Co on August 29, 2024 and sell it today you would earn a total of 950.00 from holding X Legend Entertainment Co or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Legend Entertainment Co vs. Addcn Technology Co
Performance |
| Timeline |
| X Legend Entertainment |
| Addcn Technology |
X Legend and Addcn Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Legend and Addcn Technology
The main advantage of trading using opposite X Legend and Addcn Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Legend position performs unexpectedly, Addcn Technology 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 Addcn Technology will offset losses from the drop in Addcn Technology's long position.| X Legend vs. Chunghwa Telecom Co | X Legend vs. CTBC Financial Holding | X Legend vs. Fubon Financial Holding | X Legend vs. President Chain Store |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |