Correlation Between Almacenes Xito and WEBUY GLOBAL
Can any of the company-specific risk be diversified away by investing in both Almacenes Xito and WEBUY GLOBAL 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 Almacenes Xito and WEBUY GLOBAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almacenes xito SA and WEBUY GLOBAL LTD, you can compare the effects of market volatilities on Almacenes Xito and WEBUY GLOBAL 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 Almacenes Xito with a short position of WEBUY GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almacenes Xito and WEBUY GLOBAL.
Diversification Opportunities for Almacenes Xito and WEBUY GLOBAL
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Almacenes and WEBUY is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Almacenes xito SA and WEBUY GLOBAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBUY GLOBAL LTD and Almacenes Xito 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 Almacenes xito SA are associated (or correlated) with WEBUY GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBUY GLOBAL LTD has no effect on the direction of Almacenes Xito i.e., Almacenes Xito and WEBUY GLOBAL go up and down completely randomly.
Pair Corralation between Almacenes Xito and WEBUY GLOBAL
Given the investment horizon of 90 days Almacenes xito SA is expected to under-perform the WEBUY GLOBAL. But the stock apears to be less risky and, when comparing its historical volatility, Almacenes xito SA is 13.19 times less risky than WEBUY GLOBAL. The stock trades about -0.25 of its potential returns per unit of risk. The WEBUY GLOBAL LTD is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 13.00 in WEBUY GLOBAL LTD on August 28, 2024 and sell it today you would earn a total of 5.00 from holding WEBUY GLOBAL LTD or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Almacenes xito SA vs. WEBUY GLOBAL LTD
Performance |
| Timeline |
| Almacenes xito SA |
| WEBUY GLOBAL LTD |
Almacenes Xito and WEBUY GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Almacenes Xito and WEBUY GLOBAL
The main advantage of trading using opposite Almacenes Xito and WEBUY GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almacenes Xito position performs unexpectedly, WEBUY GLOBAL 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 WEBUY GLOBAL will offset losses from the drop in WEBUY GLOBAL's long position.| Almacenes Xito vs. MOGU Inc | Almacenes Xito vs. iPower Inc | Almacenes Xito vs. Jeffs Brands | Almacenes Xito vs. Kidpik Corp |
| WEBUY GLOBAL vs. MOGU Inc | WEBUY GLOBAL vs. iPower Inc | WEBUY GLOBAL vs. Jeffs Brands | WEBUY GLOBAL vs. Kidpik Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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