Correlation Between Futu Holdings and Xp
Can any of the company-specific risk be diversified away by investing in both Futu Holdings and Xp 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 Futu Holdings and Xp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futu Holdings and Xp Inc, you can compare the effects of market volatilities on Futu Holdings and Xp 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 Futu Holdings with a short position of Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futu Holdings and Xp.
Diversification Opportunities for Futu Holdings and Xp
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Futu and Xp is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Futu Holdings and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc and Futu Holdings 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 Futu Holdings are associated (or correlated) with Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Futu Holdings i.e., Futu Holdings and Xp go up and down completely randomly.
Pair Corralation between Futu Holdings and Xp
Given the investment horizon of 90 days Futu Holdings is expected to generate 1.5 times more return on investment than Xp. However, Futu Holdings is 1.5 times more volatile than Xp Inc. It trades about 0.07 of its potential returns per unit of risk. Xp Inc is currently generating about -0.06 per unit of risk. If you would invest 5,281 in Futu Holdings on September 4, 2024 and sell it today you would earn a total of 3,251 from holding Futu Holdings or generate 61.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futu Holdings vs. Xp Inc
Performance |
| Timeline |
| Futu Holdings |
| Xp Inc |
Futu Holdings and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futu Holdings and Xp
The main advantage of trading using opposite Futu Holdings and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futu Holdings position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.| Futu Holdings vs. Bit Digital | Futu Holdings vs. Xp Inc | Futu Holdings vs. Magic Empire Global | Futu Holdings vs. Applied Blockchain |
| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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