Correlation Between CSE Global and Xalles Holdings
Can any of the company-specific risk be diversified away by investing in both CSE Global and Xalles Holdings 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 CSE Global and Xalles Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSE Global Limited and Xalles Holdings, you can compare the effects of market volatilities on CSE Global and Xalles Holdings 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 CSE Global with a short position of Xalles Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSE Global and Xalles Holdings.
Diversification Opportunities for CSE Global and Xalles Holdings
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CSE and Xalles is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CSE Global Limited and Xalles Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xalles Holdings and CSE Global 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 CSE Global Limited are associated (or correlated) with Xalles Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xalles Holdings has no effect on the direction of CSE Global i.e., CSE Global and Xalles Holdings go up and down completely randomly.
Pair Corralation between CSE Global and Xalles Holdings
Assuming the 90 days horizon CSE Global is expected to generate 2.34 times less return on investment than Xalles Holdings. But when comparing it to its historical volatility, CSE Global Limited is 2.66 times less risky than Xalles Holdings. It trades about 0.04 of its potential returns per unit of risk. Xalles Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.23 in Xalles Holdings on September 2, 2024 and sell it today you would lose (0.18) from holding Xalles Holdings or give up 78.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.49% |
| Values | Daily Returns |
CSE Global Limited vs. Xalles Holdings
Performance |
| Timeline |
| CSE Global Limited |
| Xalles Holdings |
CSE Global and Xalles Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSE Global and Xalles Holdings
The main advantage of trading using opposite CSE Global and Xalles Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSE Global position performs unexpectedly, Xalles Holdings 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 Xalles Holdings will offset losses from the drop in Xalles Holdings' long position.| CSE Global vs. Appen Limited | CSE Global vs. Appen Limited | CSE Global vs. Deveron Corp | CSE Global vs. Capgemini SE ADR |
| Xalles Holdings vs. Two Hands Corp | Xalles Holdings vs. Visium Technologies | Xalles Holdings vs. Tautachrome | Xalles Holdings vs. V Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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