Correlation Between Ready Capital and XAI Octagon
Can any of the company-specific risk be diversified away by investing in both Ready Capital and XAI Octagon 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 Ready Capital and XAI Octagon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ready Capital Corp and XAI Octagon Floating, you can compare the effects of market volatilities on Ready Capital and XAI Octagon 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 Ready Capital with a short position of XAI Octagon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ready Capital and XAI Octagon.
Diversification Opportunities for Ready Capital and XAI Octagon
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ready and XAI is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ready Capital Corp and XAI Octagon Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAI Octagon Floating and Ready Capital 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 Ready Capital Corp are associated (or correlated) with XAI Octagon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAI Octagon Floating has no effect on the direction of Ready Capital i.e., Ready Capital and XAI Octagon go up and down completely randomly.
Pair Corralation between Ready Capital and XAI Octagon
Allowing for the 90-day total investment horizon Ready Capital Corp is expected to under-perform the XAI Octagon. In addition to that, Ready Capital is 3.57 times more volatile than XAI Octagon Floating. It trades about 0.0 of its total potential returns per unit of risk. XAI Octagon Floating is currently generating about 0.09 per unit of volatility. If you would invest 659.00 in XAI Octagon Floating on August 28, 2024 and sell it today you would earn a total of 36.00 from holding XAI Octagon Floating or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ready Capital Corp vs. XAI Octagon Floating
Performance |
| Timeline |
| Ready Capital Corp |
| XAI Octagon Floating |
Ready Capital and XAI Octagon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ready Capital and XAI Octagon
The main advantage of trading using opposite Ready Capital and XAI Octagon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ready Capital position performs unexpectedly, XAI Octagon 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 Octagon will offset losses from the drop in XAI Octagon's long position.| Ready Capital vs. Ellington Residential Mortgage | Ready Capital vs. Ellington Financial | Ready Capital vs. Dynex Capital | Ready Capital vs. Orchid Island Capital |
| XAI Octagon vs. Oxford Lane Capital | XAI Octagon vs. Capital Southwest | XAI Octagon vs. Cornerstone Strategic Return | XAI Octagon vs. Cornerstone Strategic Value |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |