Correlation Between XMReality and SECITS Holding
Can any of the company-specific risk be diversified away by investing in both XMReality and SECITS Holding 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 XMReality and SECITS Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XMReality AB and SECITS Holding AB, you can compare the effects of market volatilities on XMReality and SECITS Holding 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 XMReality with a short position of SECITS Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of XMReality and SECITS Holding.
Diversification Opportunities for XMReality and SECITS Holding
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XMReality and SECITS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding XMReality AB and SECITS Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECITS Holding AB and XMReality 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 XMReality AB are associated (or correlated) with SECITS Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECITS Holding AB has no effect on the direction of XMReality i.e., XMReality and SECITS Holding go up and down completely randomly.
Pair Corralation between XMReality and SECITS Holding
Assuming the 90 days trading horizon XMReality AB is expected to under-perform the SECITS Holding. But the stock apears to be less risky and, when comparing its historical volatility, XMReality AB is 1.23 times less risky than SECITS Holding. The stock trades about -0.05 of its potential returns per unit of risk. The SECITS Holding AB is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 92.00 in SECITS Holding AB on August 25, 2024 and sell it today you would lose (90.06) from holding SECITS Holding AB or give up 97.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XMReality AB vs. SECITS Holding AB
Performance |
| Timeline |
| XMReality AB |
| SECITS Holding AB |
XMReality and SECITS Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XMReality and SECITS Holding
The main advantage of trading using opposite XMReality and SECITS Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XMReality position performs unexpectedly, SECITS Holding 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 SECITS Holding will offset losses from the drop in SECITS Holding's long position.| XMReality vs. Tangiamo Touch Technology | XMReality vs. Zaplox AB | XMReality vs. Alligator Bioscience AB | XMReality vs. Garo AB |
| SECITS Holding vs. Svedbergs i Dalstorp | SECITS Holding vs. Know IT AB | SECITS Holding vs. FormPipe Software AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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