Correlation Between Xtract One and Sparx Technology
Can any of the company-specific risk be diversified away by investing in both Xtract One and Sparx Technology 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 Sparx Technology 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 Sparx Technology, you can compare the effects of market volatilities on Xtract One and Sparx Technology 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 Sparx Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Sparx Technology.
Diversification Opportunities for Xtract One and Sparx Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtract and Sparx is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Sparx Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparx Technology 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 Sparx Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparx Technology has no effect on the direction of Xtract One i.e., Xtract One and Sparx Technology go up and down completely randomly.
Pair Corralation between Xtract One and Sparx Technology
Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Sparx Technology. In addition to that, Xtract One is 1.39 times more volatile than Sparx Technology. It trades about -0.1 of its total potential returns per unit of risk. Sparx Technology is currently generating about 0.2 per unit of volatility. If you would invest 2,425 in Sparx Technology on August 26, 2024 and sell it today you would earn a total of 218.00 from holding Sparx Technology or generate 8.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtract One Technologies vs. Sparx Technology
Performance |
| Timeline |
| Xtract One Technologies |
| Sparx Technology |
Xtract One and Sparx Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtract One and Sparx Technology
The main advantage of trading using opposite Xtract One and Sparx Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtract One position performs unexpectedly, Sparx Technology 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 Sparx Technology will offset losses from the drop in Sparx Technology's long position.| Xtract One vs. Slate Grocery REIT | Xtract One vs. Roots Corp | Xtract One vs. Aimia Inc | Xtract One vs. Tucows Inc |
| Sparx Technology vs. Primaris Retail RE | Sparx Technology vs. Bip Investment Corp | Sparx Technology vs. Partners Value Investments | Sparx Technology vs. DIRTT Environmental Solutions |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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