Correlation Between X Legend and Vate Technology
Can any of the company-specific risk be diversified away by investing in both X Legend and Vate 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 Vate 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 Vate Technology Co, you can compare the effects of market volatilities on X Legend and Vate 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 Vate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and Vate Technology.
Diversification Opportunities for X Legend and Vate Technology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between 4994 and Vate is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co and Vate Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vate 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 Vate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vate Technology has no effect on the direction of X Legend i.e., X Legend and Vate Technology go up and down completely randomly.
Pair Corralation between X Legend and Vate Technology
Assuming the 90 days trading horizon X Legend Entertainment Co is expected to generate 0.87 times more return on investment than Vate Technology. However, X Legend Entertainment Co is 1.15 times less risky than Vate Technology. It trades about 0.31 of its potential returns per unit of risk. Vate Technology Co is currently generating about -0.23 per unit of risk. If you would invest 10,150 in X Legend Entertainment Co on September 5, 2024 and sell it today you would earn a total of 850.00 from holding X Legend Entertainment Co or generate 8.37% 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. Vate Technology Co
Performance |
| Timeline |
| X Legend Entertainment |
| Vate Technology |
X Legend and Vate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Legend and Vate Technology
The main advantage of trading using opposite X Legend and Vate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Legend position performs unexpectedly, Vate 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 Vate Technology will offset losses from the drop in Vate Technology's long position.| X Legend vs. China Steel Corp | X Legend vs. Formosa Plastics Corp | X Legend vs. Cathay Financial Holding | X Legend vs. Fubon Financial Holding |
| Vate Technology vs. An Shin Food Services | Vate Technology vs. X Legend Entertainment Co | Vate Technology vs. Orient Semiconductor Electronics | Vate Technology vs. Winstek Semiconductor 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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