Correlation Between XCHG Limited and Primoris Services
Can any of the company-specific risk be diversified away by investing in both XCHG Limited and Primoris Services 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 XCHG Limited and Primoris Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XCHG Limited American and Primoris Services, you can compare the effects of market volatilities on XCHG Limited and Primoris Services 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 XCHG Limited with a short position of Primoris Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of XCHG Limited and Primoris Services.
Diversification Opportunities for XCHG Limited and Primoris Services
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XCHG and Primoris is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding XCHG Limited American and Primoris Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primoris Services and XCHG Limited 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 XCHG Limited American are associated (or correlated) with Primoris Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primoris Services has no effect on the direction of XCHG Limited i.e., XCHG Limited and Primoris Services go up and down completely randomly.
Pair Corralation between XCHG Limited and Primoris Services
Considering the 90-day investment horizon XCHG Limited American is expected to under-perform the Primoris Services. In addition to that, XCHG Limited is 2.23 times more volatile than Primoris Services. It trades about -0.13 of its total potential returns per unit of risk. Primoris Services is currently generating about 0.41 per unit of volatility. If you would invest 6,262 in Primoris Services on September 1, 2024 and sell it today you would earn a total of 2,109 from holding Primoris Services or generate 33.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XCHG Limited American vs. Primoris Services
Performance |
| Timeline |
| XCHG Limited American |
| Primoris Services |
XCHG Limited and Primoris Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XCHG Limited and Primoris Services
The main advantage of trading using opposite XCHG Limited and Primoris Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XCHG Limited position performs unexpectedly, Primoris Services 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 Primoris Services will offset losses from the drop in Primoris Services' long position.| XCHG Limited vs. Primoris Services | XCHG Limited vs. Summit Materials | XCHG Limited vs. Park Ohio Holdings | XCHG Limited vs. Everus Construction Group |
| Primoris Services vs. MYR Group | Primoris Services vs. Granite Construction Incorporated | Primoris Services vs. Matrix Service Co | Primoris Services vs. Api Group Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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