Correlation Between Xos Equity and The9
Can any of the company-specific risk be diversified away by investing in both Xos Equity and The9 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 Xos Equity and The9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Equity Warrants and The9 Ltd ADR, you can compare the effects of market volatilities on Xos Equity and The9 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 Xos Equity with a short position of The9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos Equity and The9.
Diversification Opportunities for Xos Equity and The9
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xos and The9 is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and The9 Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The9 Ltd ADR and Xos Equity 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 Xos Equity Warrants are associated (or correlated) with The9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The9 Ltd ADR has no effect on the direction of Xos Equity i.e., Xos Equity and The9 go up and down completely randomly.
Pair Corralation between Xos Equity and The9
Assuming the 90 days horizon Xos Equity Warrants is expected to generate 15.59 times more return on investment than The9. However, Xos Equity is 15.59 times more volatile than The9 Ltd ADR. It trades about 0.09 of its potential returns per unit of risk. The9 Ltd ADR is currently generating about 0.08 per unit of risk. If you would invest 3.49 in Xos Equity Warrants on September 12, 2024 and sell it today you would lose (2.93) from holding Xos Equity Warrants or give up 83.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 92.74% |
Values | Daily Returns |
Xos Equity Warrants vs. The9 Ltd ADR
Performance |
Timeline |
Xos Equity Warrants |
The9 Ltd ADR |
Xos Equity and The9 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xos Equity and The9
The main advantage of trading using opposite Xos Equity and The9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos Equity position performs unexpectedly, The9 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 The9 will offset losses from the drop in The9's long position.Xos Equity vs. Cooper Stnd | Xos Equity vs. Motorcar Parts of | Xos Equity vs. Stoneridge | Xos Equity vs. Dorman Products |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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