Correlation Between Xerox Corp and Applied Blockchain
Can any of the company-specific risk be diversified away by investing in both Xerox Corp and Applied Blockchain 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 Xerox Corp and Applied Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xerox Corp and Applied Blockchain, you can compare the effects of market volatilities on Xerox Corp and Applied Blockchain 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 Xerox Corp with a short position of Applied Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xerox Corp and Applied Blockchain.
Diversification Opportunities for Xerox Corp and Applied Blockchain
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xerox and Applied is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xerox Corp and Applied Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Blockchain and Xerox Corp 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 Xerox Corp are associated (or correlated) with Applied Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Blockchain has no effect on the direction of Xerox Corp i.e., Xerox Corp and Applied Blockchain go up and down completely randomly.
Pair Corralation between Xerox Corp and Applied Blockchain
Considering the 90-day investment horizon Xerox Corp is expected to generate 3.2 times less return on investment than Applied Blockchain. But when comparing it to its historical volatility, Xerox Corp is 3.13 times less risky than Applied Blockchain. It trades about 0.2 of its potential returns per unit of risk. Applied Blockchain is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 736.00 in Applied Blockchain on August 31, 2024 and sell it today you would earn a total of 230.00 from holding Applied Blockchain or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xerox Corp vs. Applied Blockchain
Performance |
| Timeline |
| Xerox Corp |
| Applied Blockchain |
Xerox Corp and Applied Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xerox Corp and Applied Blockchain
The main advantage of trading using opposite Xerox Corp and Applied Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xerox Corp position performs unexpectedly, Applied Blockchain 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 Applied Blockchain will offset losses from the drop in Applied Blockchain's long position.| Xerox Corp vs. ExlService Holdings | Xerox Corp vs. CSP Inc | Xerox Corp vs. ASGN Inc | Xerox Corp vs. Jack Henry Associates |
| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |