Correlation Between XAI Octagon and Aberdeen Australia

Can any of the company-specific risk be diversified away by investing in both XAI Octagon and Aberdeen Australia 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 Aberdeen Australia 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 Aberdeen Australia Ef, you can compare the effects of market volatilities on XAI Octagon and Aberdeen Australia 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 Aberdeen Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and Aberdeen Australia.

Diversification Opportunities for XAI Octagon and Aberdeen Australia

0.08

Correlation Coefficient

XAI Octagon  Aberdeen Australia

Significant diversification

The 3 months correlation between XAI and Aberdeen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Aberdeen Australia Ef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Australia 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 Aberdeen Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Australia has no effect on the direction of XAI Octagon i.e., XAI Octagon and Aberdeen Australia go up and down completely randomly.

Pair Corralation between XAI Octagon and Aberdeen Australia

Given the investment horizon of 90 days XAI Octagon is expected to generate 1.07 times less return on investment than Aberdeen Australia. But when comparing it to its historical volatility, XAI Octagon Floating is 2.07 times less risky than Aberdeen Australia. It trades about 0.56 of its potential returns per unit of risk. Aberdeen Australia Ef is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  429.00  in Aberdeen Australia Ef on September 4, 2024 and sell it today you would earn a total of  24.00  from holding Aberdeen Australia Ef or generate 5.59% return on investment over 90 days.

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

XAI Octagon Floating  vs.  Aberdeen Australia Ef

XAI Octagon Floating

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in XAI Octagon Floating are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, XAI Octagon may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aberdeen Australia

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Australia Ef are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Aberdeen Australia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with XAI Octagon and Aberdeen Australia

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

The idea behind XAI Octagon Floating and Aberdeen Australia Ef 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.