Correlation Between XCPCNL Business and Global Payments

Can any of the company-specific risk be diversified away by investing in both XCPCNL Business and Global Payments 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 XCPCNL Business and Global Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XCPCNL Business Services and Global Payments, you can compare the effects of market volatilities on XCPCNL Business and Global Payments 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 XCPCNL Business with a short position of Global Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of XCPCNL Business and Global Payments.

Diversification Opportunities for XCPCNL Business and Global Payments

0.0

Correlation Coefficient

XCPCNL Business  Global Payments

Pay attention - limited upside

The 3 months correlation between XCPCNL and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XCPCNL Business Services and Global Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payments and XCPCNL Business 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 XCPCNL Business Services are associated (or correlated) with Global Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payments has no effect on the direction of XCPCNL Business i.e., XCPCNL Business and Global Payments go up and down completely randomly.

Pair Corralation between XCPCNL Business and Global Payments

Given the investment horizon of 90 days XCPCNL Business Services is expected to under-perform the Global Payments. In addition to that, XCPCNL Business is 19.67 times more volatile than Global Payments. It trades about -0.22 of its total potential returns per unit of risk. Global Payments is currently generating about -0.2 per unit of volatility. If you would invest  11,912  in Global Payments on September 28, 2024 and sell it today you would lose (536.00) from holding Global Payments or give up 4.5% of portfolio value over 90 days.

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

XCPCNL Business Services  vs.  Global Payments

XCPCNL Business Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XCPCNL Business Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Global Payments

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Payments are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Global Payments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with XCPCNL Business and Global Payments

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

The idea behind XCPCNL Business Services and Global Payments 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.