Correlation Between Associated Capital and XAI Octagon
Can any of the company-specific risk be diversified away by investing in both Associated Capital and XAI Octagon 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 Associated Capital and XAI Octagon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and XAI Octagon Floating, you can compare the effects of market volatilities on Associated Capital and XAI Octagon 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 Associated Capital with a short position of XAI Octagon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and XAI Octagon.
Diversification Opportunities for Associated Capital and XAI Octagon
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and XAI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and XAI Octagon Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAI Octagon Floating and Associated Capital 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 Associated Capital Group are associated (or correlated) with XAI Octagon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAI Octagon Floating has no effect on the direction of Associated Capital i.e., Associated Capital and XAI Octagon go up and down completely randomly.
Pair Corralation between Associated Capital and XAI Octagon
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 18.83 times less return on investment than XAI Octagon. In addition to that, Associated Capital is 1.75 times more volatile than XAI Octagon Floating. It trades about 0.0 of its total potential returns per unit of risk. XAI Octagon Floating is currently generating about 0.08 per unit of volatility. If you would invest 496.00 in XAI Octagon Floating on August 28, 2024 and sell it today you would earn a total of 199.00 from holding XAI Octagon Floating or generate 40.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. XAI Octagon Floating
Performance |
| Timeline |
| Associated Capital |
| XAI Octagon Floating |
Associated Capital and XAI Octagon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and XAI Octagon
The main advantage of trading using opposite Associated Capital and XAI Octagon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, XAI Octagon 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 XAI Octagon will offset losses from the drop in XAI Octagon's long position.| Associated Capital vs. Aurora Innovation | Associated Capital vs. HUMANA INC | Associated Capital vs. Aquagold International | Associated Capital vs. Barloworld Ltd ADR |
| XAI Octagon vs. Oxford Lane Capital | XAI Octagon vs. Capital Southwest | XAI Octagon vs. Cornerstone Strategic Return | XAI Octagon vs. Cornerstone Strategic Value |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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