Correlation Between XSpring Capital and LH Shopping

Can any of the company-specific risk be diversified away by investing in both XSpring Capital and LH Shopping 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 XSpring Capital and LH Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XSpring Capital Public and LH Shopping Centers, you can compare the effects of market volatilities on XSpring Capital and LH Shopping 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 XSpring Capital with a short position of LH Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of XSpring Capital and LH Shopping.

Diversification Opportunities for XSpring Capital and LH Shopping

-0.52

Correlation Coefficient

XSpring Capital  LH Shopping

Excellent diversification

The 3 months correlation between XSpring and LHSC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding XSpring Capital Public and LH Shopping Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Shopping Centers and XSpring Capital 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 XSpring Capital Public are associated (or correlated) with LH Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Shopping Centers has no effect on the direction of XSpring Capital i.e., XSpring Capital and LH Shopping go up and down completely randomly.

Pair Corralation between XSpring Capital and LH Shopping

Assuming the 90 days trading horizon XSpring Capital Public is expected to under-perform the LH Shopping. In addition to that, XSpring Capital is 2.72 times more volatile than LH Shopping Centers. It trades about -0.01 of its total potential returns per unit of risk. LH Shopping Centers is currently generating about 0.05 per unit of volatility. If you would invest  849.00  in LH Shopping Centers on September 13, 2024 and sell it today you would earn a total of  281.00  from holding LH Shopping Centers or generate 33.1% return on investment over 90 days.

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

XSpring Capital Public  vs.  LH Shopping Centers

XSpring Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XSpring Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

LH Shopping Centers

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LH Shopping Centers are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, LH Shopping disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XSpring Capital and LH Shopping

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

The idea behind XSpring Capital Public and LH Shopping Centers 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.