Correlation Between XChange TECINC and Compass
Can any of the company-specific risk be diversified away by investing in both XChange TECINC and Compass 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 XChange TECINC and Compass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XChange TECINC and Compass, you can compare the effects of market volatilities on XChange TECINC and Compass 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 XChange TECINC with a short position of Compass. Check out your portfolio center. Please also check ongoing floating volatility patterns of XChange TECINC and Compass.
Diversification Opportunities for XChange TECINC and Compass
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between XChange and Compass is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding XChange TECINC and Compass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass and XChange TECINC 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 XChange TECINC are associated (or correlated) with Compass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass has no effect on the direction of XChange TECINC i.e., XChange TECINC and Compass go up and down completely randomly.
Pair Corralation between XChange TECINC and Compass
Considering the 90-day investment horizon XChange TECINC is expected to under-perform the Compass. In addition to that, XChange TECINC is 3.96 times more volatile than Compass. It trades about -0.18 of its total potential returns per unit of risk. Compass is currently generating about -0.17 per unit of volatility. If you would invest 943.00 in Compass on March 25, 2025 and sell it today you would lose (331.00) from holding Compass or give up 35.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
XChange TECINC vs. Compass
Performance |
| Timeline |
| XChange TECINC |
| Compass |
XChange TECINC and Compass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XChange TECINC and Compass
The main advantage of trading using opposite XChange TECINC and Compass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XChange TECINC position performs unexpectedly, Compass 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 Compass will offset losses from the drop in Compass' long position.| XChange TECINC vs. Hasbro Inc | XChange TECINC vs. Eldorado Gold Corp | XChange TECINC vs. LG Display Co | XChange TECINC vs. Universal Display |
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 CEOs Directory module to screen CEOs from public companies around the world.
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