Correlation Between XCPCNL Business and Lichen China
Can any of the company-specific risk be diversified away by investing in both XCPCNL Business and Lichen China 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 XCPCNL Business and Lichen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XCPCNL Business Services and Lichen China Limited, you can compare the effects of market volatilities on XCPCNL Business and Lichen China 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 XCPCNL Business with a short position of Lichen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of XCPCNL Business and Lichen China.
Diversification Opportunities for XCPCNL Business and Lichen China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XCPCNL and Lichen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XCPCNL Business Services and Lichen China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lichen China Limited and XCPCNL Business 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 XCPCNL Business Services are associated (or correlated) with Lichen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lichen China Limited has no effect on the direction of XCPCNL Business i.e., XCPCNL Business and Lichen China go up and down completely randomly.
Pair Corralation between XCPCNL Business and Lichen China
Given the investment horizon of 90 days XCPCNL Business Services is expected to generate 12.42 times more return on investment than Lichen China. However, XCPCNL Business is 12.42 times more volatile than Lichen China Limited. It trades about 0.1 of its potential returns per unit of risk. Lichen China Limited is currently generating about 0.04 per unit of risk. If you would invest 0.06 in XCPCNL Business Services on August 31, 2024 and sell it today you would lose (0.05) from holding XCPCNL Business Services or give up 83.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
XCPCNL Business Services vs. Lichen China Limited
Performance |
| Timeline |
| XCPCNL Business Services |
| Lichen China Limited |
XCPCNL Business and Lichen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XCPCNL Business and Lichen China
The main advantage of trading using opposite XCPCNL Business and Lichen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XCPCNL Business position performs unexpectedly, Lichen China 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 Lichen China will offset losses from the drop in Lichen China's long position.| XCPCNL Business vs. Seychelle Environmtl | XCPCNL Business vs. Energy and Water | XCPCNL Business vs. One World Universe | XCPCNL Business vs. Vow ASA |
| Lichen China vs. First Advantage Corp | Lichen China vs. Discount Print USA | Lichen China vs. Cass Information Systems | Lichen China vs. Civeo 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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