Correlation Between Orange SA and XL Axiata
Can any of the company-specific risk be diversified away by investing in both Orange SA and XL Axiata 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 Orange SA and XL Axiata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange SA ADR and XL Axiata Tbk, you can compare the effects of market volatilities on Orange SA and XL Axiata 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 Orange SA with a short position of XL Axiata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and XL Axiata.
Diversification Opportunities for Orange SA and XL Axiata
Poor diversification
The 3 months correlation between Orange and PTXKY is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA ADR and XL Axiata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Axiata Tbk and Orange SA 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 Orange SA ADR are associated (or correlated) with XL Axiata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Axiata Tbk has no effect on the direction of Orange SA i.e., Orange SA and XL Axiata go up and down completely randomly.
Pair Corralation between Orange SA and XL Axiata
Given the investment horizon of 90 days Orange SA ADR is expected to generate 0.22 times more return on investment than XL Axiata. However, Orange SA ADR is 4.48 times less risky than XL Axiata. It trades about -0.14 of its potential returns per unit of risk. XL Axiata Tbk is currently generating about -0.06 per unit of risk. If you would invest 1,086 in Orange SA ADR on August 29, 2024 and sell it today you would lose (34.00) from holding Orange SA ADR or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Orange SA ADR vs. XL Axiata Tbk
Performance |
| Timeline |
| Orange SA ADR |
| XL Axiata Tbk |
Orange SA and XL Axiata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange SA and XL Axiata
The main advantage of trading using opposite Orange SA and XL Axiata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA position performs unexpectedly, XL Axiata 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 XL Axiata will offset losses from the drop in XL Axiata's long position.| Orange SA vs. Telefonica Brasil SA | Orange SA vs. Vodafone Group PLC | Orange SA vs. Grupo Televisa SAB | Orange SA vs. America Movil SAB |
| XL Axiata vs. MTN Group Ltd | XL Axiata vs. Vodacom Group Ltd | XL Axiata vs. Telenor ASA ADR | XL Axiata vs. KT Corporation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |