Correlation Between ITC and Xai
Can any of the company-specific risk be diversified away by investing in both ITC and Xai 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 ITC and Xai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITC and Xai, you can compare the effects of market volatilities on ITC and Xai 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 ITC with a short position of Xai. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITC and Xai.
Diversification Opportunities for ITC and Xai
Average diversification
The 3 months correlation between ITC and Xai is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ITC and Xai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xai and ITC 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 ITC are associated (or correlated) with Xai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xai has no effect on the direction of ITC i.e., ITC and Xai go up and down completely randomly.
Pair Corralation between ITC and Xai
If you would invest 19.00 in Xai on August 25, 2024 and sell it today you would earn a total of 7.00 from holding Xai or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
ITC vs. Xai
Performance |
| Timeline |
| ITC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xai |
ITC and Xai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITC and Xai
The main advantage of trading using opposite ITC and Xai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITC position performs unexpectedly, Xai 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 Xai will offset losses from the drop in Xai's long position.The idea behind ITC and Xai 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.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |