Correlation Between Xp and Value Line
Can any of the company-specific risk be diversified away by investing in both Xp and Value Line 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 Xp and Value Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Value Line, you can compare the effects of market volatilities on Xp and Value Line 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 Xp with a short position of Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Value Line.
Diversification Opportunities for Xp and Value Line
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xp and Value is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Value Line in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line and Xp 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 Xp Inc are associated (or correlated) with Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line has no effect on the direction of Xp i.e., Xp and Value Line go up and down completely randomly.
Pair Corralation between Xp and Value Line
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Value Line. But the stock apears to be less risky and, when comparing its historical volatility, Xp Inc is 1.27 times less risky than Value Line. The stock trades about -0.25 of its potential returns per unit of risk. The Value Line is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,056 in Value Line on August 27, 2024 and sell it today you would earn a total of 127.00 from holding Value Line or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. Value Line
Performance |
| Timeline |
| Xp Inc |
| Value Line |
Xp and Value Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Value Line
The main advantage of trading using opposite Xp and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| Value Line vs. Dun Bradstreet Holdings | Value Line vs. FactSet Research Systems | Value Line vs. Moodys | Value Line vs. MSCI Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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