Correlation Between XChange TECINC and Dow Jones
Can any of the company-specific risk be diversified away by investing in both XChange TECINC and Dow Jones 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 XChange TECINC and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XChange TECINC and Dow Jones Industrial, you can compare the effects of market volatilities on XChange TECINC and Dow Jones 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 XChange TECINC with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of XChange TECINC and Dow Jones.
Diversification Opportunities for XChange TECINC and Dow Jones
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XChange and Dow is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding XChange TECINC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and XChange TECINC 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 XChange TECINC are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of XChange TECINC i.e., XChange TECINC and Dow Jones go up and down completely randomly.
Pair Corralation between XChange TECINC and Dow Jones
Considering the 90-day investment horizon XChange TECINC is expected to under-perform the Dow Jones. In addition to that, XChange TECINC is 25.01 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XChange TECINC vs. Dow Jones Industrial
Performance |
| Timeline |
XChange TECINC and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
XChange TECINC
Pair trading matchups for XChange TECINC
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with XChange TECINC and Dow Jones
The main advantage of trading using opposite XChange TECINC and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XChange TECINC position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| XChange TECINC vs. Asure Software | XChange TECINC vs. Arrow Electronics | XChange TECINC vs. Park Ohio Holdings | XChange TECINC vs. Valneva SE ADR |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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.
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