Correlation Between Xenonics Holdings and Acuity Brands
Can any of the company-specific risk be diversified away by investing in both Xenonics Holdings and Acuity Brands 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 Xenonics Holdings and Acuity Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenonics Holdings and Acuity Brands, you can compare the effects of market volatilities on Xenonics Holdings and Acuity Brands 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 Xenonics Holdings with a short position of Acuity Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenonics Holdings and Acuity Brands.
Diversification Opportunities for Xenonics Holdings and Acuity Brands
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xenonics and Acuity is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xenonics Holdings and Acuity Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuity Brands and Xenonics Holdings 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 Xenonics Holdings are associated (or correlated) with Acuity Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuity Brands has no effect on the direction of Xenonics Holdings i.e., Xenonics Holdings and Acuity Brands go up and down completely randomly.
Pair Corralation between Xenonics Holdings and Acuity Brands
Assuming the 90 days horizon Xenonics Holdings is expected to generate 18.71 times more return on investment than Acuity Brands. However, Xenonics Holdings is 18.71 times more volatile than Acuity Brands. It trades about 0.16 of its potential returns per unit of risk. Acuity Brands is currently generating about 0.08 per unit of risk. If you would invest 0.05 in Xenonics Holdings on August 27, 2024 and sell it today you would earn a total of 0.12 from holding Xenonics Holdings or generate 240.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.07% |
| Values | Daily Returns |
Xenonics Holdings vs. Acuity Brands
Performance |
| Timeline |
| Xenonics Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Acuity Brands |
Xenonics Holdings and Acuity Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenonics Holdings and Acuity Brands
The main advantage of trading using opposite Xenonics Holdings and Acuity Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenonics Holdings position performs unexpectedly, Acuity Brands 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 Acuity Brands will offset losses from the drop in Acuity Brands' long position.| Xenonics Holdings vs. Pioneer Power Solutions | Xenonics Holdings vs. CBAK Energy Technology | Xenonics Holdings vs. Ocean Power Technologies | Xenonics Holdings vs. Ideal Power |
| Acuity Brands vs. Bloom Energy Corp | Acuity Brands vs. Eos Energy Enterprises | Acuity Brands vs. Sunrise New Energy | Acuity Brands vs. Flux Power Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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