Correlation Between ChampionX and XIAO I
Can any of the company-specific risk be diversified away by investing in both ChampionX and XIAO I 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 ChampionX and XIAO I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and XIAO I American, you can compare the effects of market volatilities on ChampionX and XIAO I 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 ChampionX with a short position of XIAO I. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and XIAO I.
Diversification Opportunities for ChampionX and XIAO I
Very weak diversification
The 3 months correlation between ChampionX and XIAO is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and XIAO I American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XIAO I American and ChampionX 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 ChampionX are associated (or correlated) with XIAO I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XIAO I American has no effect on the direction of ChampionX i.e., ChampionX and XIAO I go up and down completely randomly.
Pair Corralation between ChampionX and XIAO I
Considering the 90-day investment horizon ChampionX is expected to generate 0.41 times more return on investment than XIAO I. However, ChampionX is 2.44 times less risky than XIAO I. It trades about 0.22 of its potential returns per unit of risk. XIAO I American is currently generating about 0.08 per unit of risk. If you would invest 2,795 in ChampionX on September 2, 2024 and sell it today you would earn a total of 300.00 from holding ChampionX or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. XIAO I American
Performance |
| Timeline |
| ChampionX |
| XIAO I American |
ChampionX and XIAO I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and XIAO I
The main advantage of trading using opposite ChampionX and XIAO I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, XIAO I 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 XIAO I will offset losses from the drop in XIAO I's long position.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| XIAO I vs. Jacobs Solutions | XIAO I vs. Highway Holdings Limited | XIAO I vs. ChampionX | XIAO I vs. Summit Materials |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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