Correlation Between Xtract One and Automotive Finco
Can any of the company-specific risk be diversified away by investing in both Xtract One and Automotive Finco 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 Xtract One and Automotive Finco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtract One Technologies and Automotive Finco Corp, you can compare the effects of market volatilities on Xtract One and Automotive Finco 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 Xtract One with a short position of Automotive Finco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Automotive Finco.
Diversification Opportunities for Xtract One and Automotive Finco
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xtract and Automotive is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Automotive Finco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automotive Finco Corp and Xtract One 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 Xtract One Technologies are associated (or correlated) with Automotive Finco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automotive Finco Corp has no effect on the direction of Xtract One i.e., Xtract One and Automotive Finco go up and down completely randomly.
Pair Corralation between Xtract One and Automotive Finco
Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Automotive Finco. In addition to that, Xtract One is 1.75 times more volatile than Automotive Finco Corp. It trades about -0.27 of its total potential returns per unit of risk. Automotive Finco Corp is currently generating about 0.19 per unit of volatility. If you would invest 76.00 in Automotive Finco Corp on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Automotive Finco Corp or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtract One Technologies vs. Automotive Finco Corp
Performance |
| Timeline |
| Xtract One Technologies |
| Automotive Finco Corp |
Xtract One and Automotive Finco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtract One and Automotive Finco
The main advantage of trading using opposite Xtract One and Automotive Finco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtract One position performs unexpectedly, Automotive Finco 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 Automotive Finco will offset losses from the drop in Automotive Finco's long position.| Xtract One vs. Faction Investment Group | Xtract One vs. Quorum Information Technologies | Xtract One vs. Ocumetics Technology Corp | Xtract One vs. Economic Investment Trust |
| Automotive Finco vs. Xtract One Technologies | Automotive Finco vs. Canlan Ice Sports | Automotive Finco vs. Wishpond Technologies | Automotive Finco vs. TGS Esports |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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