Correlation Between Xior Student and Aedifica
Can any of the company-specific risk be diversified away by investing in both Xior Student and Aedifica 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 Xior Student and Aedifica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xior Student Housing and Aedifica, you can compare the effects of market volatilities on Xior Student and Aedifica 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 Xior Student with a short position of Aedifica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xior Student and Aedifica.
Diversification Opportunities for Xior Student and Aedifica
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xior and Aedifica is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xior Student Housing and Aedifica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedifica and Xior Student 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 Xior Student Housing are associated (or correlated) with Aedifica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedifica has no effect on the direction of Xior Student i.e., Xior Student and Aedifica go up and down completely randomly.
Pair Corralation between Xior Student and Aedifica
Assuming the 90 days trading horizon Xior Student Housing is expected to generate 1.28 times more return on investment than Aedifica. However, Xior Student is 1.28 times more volatile than Aedifica. It trades about 0.04 of its potential returns per unit of risk. Aedifica is currently generating about 0.02 per unit of risk. If you would invest 3,033 in Xior Student Housing on November 4, 2024 and sell it today you would earn a total of 62.00 from holding Xior Student Housing or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xior Student Housing vs. Aedifica
Performance |
| Timeline |
| Xior Student Housing |
| Aedifica |
Xior Student and Aedifica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xior Student and Aedifica
The main advantage of trading using opposite Xior Student and Aedifica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xior Student position performs unexpectedly, Aedifica 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 Aedifica will offset losses from the drop in Aedifica's long position.| Xior Student vs. Aedifica | Xior Student vs. Cofinimmo SA | Xior Student vs. Care Property Invest | Xior Student vs. Warehouses de Pauw |
| Aedifica vs. Cofinimmo SA | Aedifica vs. Warehouses de Pauw | Aedifica vs. Care Property Invest | Aedifica vs. Xior Student Housing |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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