Correlation Between POSaBIT Systems and Xalles Holdings
Can any of the company-specific risk be diversified away by investing in both POSaBIT Systems and Xalles Holdings 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 POSaBIT Systems and Xalles Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSaBIT Systems Corp and Xalles Holdings, you can compare the effects of market volatilities on POSaBIT Systems and Xalles Holdings 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 POSaBIT Systems with a short position of Xalles Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSaBIT Systems and Xalles Holdings.
Diversification Opportunities for POSaBIT Systems and Xalles Holdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POSaBIT and Xalles is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding POSaBIT Systems Corp and Xalles Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xalles Holdings and POSaBIT Systems 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 POSaBIT Systems Corp are associated (or correlated) with Xalles Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xalles Holdings has no effect on the direction of POSaBIT Systems i.e., POSaBIT Systems and Xalles Holdings go up and down completely randomly.
Pair Corralation between POSaBIT Systems and Xalles Holdings
Assuming the 90 days horizon POSaBIT Systems Corp is expected to generate 0.75 times more return on investment than Xalles Holdings. However, POSaBIT Systems Corp is 1.33 times less risky than Xalles Holdings. It trades about -0.03 of its potential returns per unit of risk. Xalles Holdings is currently generating about -0.12 per unit of risk. If you would invest 8.70 in POSaBIT Systems Corp on August 31, 2024 and sell it today you would lose (1.20) from holding POSaBIT Systems Corp or give up 13.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSaBIT Systems Corp vs. Xalles Holdings
Performance |
| Timeline |
| POSaBIT Systems Corp |
| Xalles Holdings |
POSaBIT Systems and Xalles Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSaBIT Systems and Xalles Holdings
The main advantage of trading using opposite POSaBIT Systems and Xalles Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSaBIT Systems position performs unexpectedly, Xalles Holdings 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 Xalles Holdings will offset losses from the drop in Xalles Holdings' long position.| POSaBIT Systems vs. The Travelers Companies | POSaBIT Systems vs. Walt Disney | POSaBIT Systems vs. Home Depot | POSaBIT Systems vs. Procter Gamble |
| Xalles Holdings vs. Two Hands Corp | Xalles Holdings vs. Visium Technologies | Xalles Holdings vs. Tautachrome | Xalles Holdings vs. V Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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