Correlation Between Adairs and X2M Connect
Can any of the company-specific risk be diversified away by investing in both Adairs and X2M Connect 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 Adairs and X2M Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adairs and X2M Connect, you can compare the effects of market volatilities on Adairs and X2M Connect 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 Adairs with a short position of X2M Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adairs and X2M Connect.
Diversification Opportunities for Adairs and X2M Connect
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adairs and X2M is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Adairs and X2M Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X2M Connect and Adairs 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 Adairs are associated (or correlated) with X2M Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X2M Connect has no effect on the direction of Adairs i.e., Adairs and X2M Connect go up and down completely randomly.
Pair Corralation between Adairs and X2M Connect
Assuming the 90 days trading horizon Adairs is expected to under-perform the X2M Connect. In addition to that, Adairs is 3.59 times more volatile than X2M Connect. It trades about -0.08 of its total potential returns per unit of risk. X2M Connect is currently generating about -0.22 per unit of volatility. If you would invest 3.30 in X2M Connect on August 27, 2024 and sell it today you would lose (0.10) from holding X2M Connect or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adairs vs. X2M Connect
Performance |
| Timeline |
| Adairs |
| X2M Connect |
Adairs and X2M Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adairs and X2M Connect
The main advantage of trading using opposite Adairs and X2M Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adairs position performs unexpectedly, X2M Connect 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 X2M Connect will offset losses from the drop in X2M Connect's long position.| Adairs vs. Jupiter Energy | Adairs vs. WA1 Resources | Adairs vs. Predictive Discovery | Adairs vs. Cooper Metals |
| X2M Connect vs. Australian United Investment | X2M Connect vs. Alternative Investment Trust | X2M Connect vs. Argo Investments | X2M Connect vs. REGAL ASIAN INVESTMENTS |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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