Correlation Between Figs and Almacenes Xito
Can any of the company-specific risk be diversified away by investing in both Figs and Almacenes Xito 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 Figs and Almacenes Xito into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and Almacenes xito SA, you can compare the effects of market volatilities on Figs and Almacenes Xito 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 Figs with a short position of Almacenes Xito. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Almacenes Xito.
Diversification Opportunities for Figs and Almacenes Xito
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Figs and Almacenes is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA and Figs 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 Figs Inc are associated (or correlated) with Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of Figs i.e., Figs and Almacenes Xito go up and down completely randomly.
Pair Corralation between Figs and Almacenes Xito
Given the investment horizon of 90 days Figs Inc is expected to under-perform the Almacenes Xito. In addition to that, Figs is 3.65 times more volatile than Almacenes xito SA. It trades about -0.13 of its total potential returns per unit of risk. Almacenes xito SA is currently generating about -0.28 per unit of volatility. If you would invest 423.00 in Almacenes xito SA on August 28, 2024 and sell it today you would lose (45.00) from holding Almacenes xito SA or give up 10.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. Almacenes xito SA
Performance |
| Timeline |
| Figs Inc |
| Almacenes xito SA |
Figs and Almacenes Xito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and Almacenes Xito
The main advantage of trading using opposite Figs and Almacenes Xito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs position performs unexpectedly, Almacenes Xito 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 Almacenes Xito will offset losses from the drop in Almacenes Xito's long position.The idea behind Figs Inc and Almacenes xito SA 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.| Almacenes Xito vs. MOGU Inc | Almacenes Xito vs. iPower Inc | Almacenes Xito vs. Jeffs Brands | Almacenes Xito 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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