Correlation Between EUDA Health and Xylo Technologies

Can any of the company-specific risk be diversified away by investing in both EUDA Health and Xylo Technologies 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 EUDA Health and Xylo Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EUDA Health Holdings and Xylo Technologies, you can compare the effects of market volatilities on EUDA Health and Xylo Technologies 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 EUDA Health with a short position of Xylo Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EUDA Health and Xylo Technologies.

Diversification Opportunities for EUDA Health and Xylo Technologies

-0.3

Correlation Coefficient

EUDA Health  Xylo Technologies

Very good diversification

The 3 months correlation between EUDA and Xylo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding EUDA Health Holdings and Xylo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylo Technologies and EUDA Health 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 EUDA Health Holdings are associated (or correlated) with Xylo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xylo Technologies has no effect on the direction of EUDA Health i.e., EUDA Health and Xylo Technologies go up and down completely randomly.

Pair Corralation between EUDA Health and Xylo Technologies

Given the investment horizon of 90 days EUDA Health Holdings is expected to generate 1.04 times more return on investment than Xylo Technologies. However, EUDA Health is 1.04 times more volatile than Xylo Technologies. It trades about 0.14 of its potential returns per unit of risk. Xylo Technologies is currently generating about 0.01 per unit of risk. If you would invest  381.00  in EUDA Health Holdings on September 12, 2024 and sell it today you would earn a total of  181.00  from holding EUDA Health Holdings or generate 47.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EUDA Health Holdings  vs.  Xylo Technologies

EUDA Health Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EUDA Health Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, EUDA Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Xylo Technologies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Xylo Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Xylo Technologies is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with EUDA Health and Xylo Technologies

The main advantage of trading using opposite EUDA Health and Xylo Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EUDA Health position performs unexpectedly, Xylo Technologies 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 Xylo Technologies will offset losses from the drop in Xylo Technologies' long position.

The idea behind EUDA Health Holdings and Xylo Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.