Correlation Between AKRO and Xai
Can any of the company-specific risk be diversified away by investing in both AKRO and Xai 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 AKRO and Xai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKRO and Xai, you can compare the effects of market volatilities on AKRO and Xai 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 AKRO with a short position of Xai. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKRO and Xai.
Diversification Opportunities for AKRO and Xai
Very poor diversification
The 3 months correlation between AKRO and Xai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AKRO and Xai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xai and AKRO 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 AKRO are associated (or correlated) with Xai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xai has no effect on the direction of AKRO i.e., AKRO and Xai go up and down completely randomly.
Pair Corralation between AKRO and Xai
Assuming the 90 days trading horizon AKRO is expected to generate 0.66 times more return on investment than Xai. However, AKRO is 1.52 times less risky than Xai. It trades about -0.11 of its potential returns per unit of risk. Xai is currently generating about -0.32 per unit of risk. If you would invest 0.05 in AKRO on November 8, 2024 and sell it today you would lose (0.01) from holding AKRO or give up 17.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKRO vs. Xai
Performance |
| Timeline |
| AKRO |
| Xai |
AKRO and Xai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKRO and Xai
The main advantage of trading using opposite AKRO and Xai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKRO position performs unexpectedly, Xai 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 will offset losses from the drop in Xai's long position.The idea behind AKRO and Xai pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |