Correlation Between XAI Octagon and Horizon Technology

Can any of the company-specific risk be diversified away by investing in both XAI Octagon and Horizon 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 XAI Octagon and Horizon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XAI Octagon Floating and Horizon Technology Finance, you can compare the effects of market volatilities on XAI Octagon and Horizon 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 XAI Octagon with a short position of Horizon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and Horizon Technology.

Diversification Opportunities for XAI Octagon and Horizon Technology

-0.39

Correlation Coefficient

XAI Octagon  Horizon Technology

Very good diversification

The 3 months correlation between XAI and Horizon is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Horizon Technology Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Technology and XAI Octagon 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 XAI Octagon Floating are associated (or correlated) with Horizon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Technology has no effect on the direction of XAI Octagon i.e., XAI Octagon and Horizon Technology go up and down completely randomly.

Pair Corralation between XAI Octagon and Horizon Technology

Given the investment horizon of 90 days XAI Octagon Floating is expected to generate 0.68 times more return on investment than Horizon Technology. However, XAI Octagon Floating is 1.47 times less risky than Horizon Technology. It trades about 0.03 of its potential returns per unit of risk. Horizon Technology Finance is currently generating about -0.15 per unit of risk. If you would invest  659.00  in XAI Octagon Floating on September 26, 2024 and sell it today you would earn a total of  9.00  from holding XAI Octagon Floating or generate 1.37% return on investment over 90 days.

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

XAI Octagon Floating  vs.  Horizon Technology Finance

XAI Octagon Floating

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in XAI Octagon Floating are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, XAI Octagon is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Horizon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Horizon Technology Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with XAI Octagon and Horizon Technology

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

The idea behind XAI Octagon Floating and Horizon Technology Finance 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.