Correlation Between Xavis and Wemade Max

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

By analyzing existing cross correlation between Xavis Co and Wemade Max Co, you can compare the effects of market volatilities on Xavis and Wemade Max 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 Xavis with a short position of Wemade Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and Wemade Max.

Diversification Opportunities for Xavis and Wemade Max

0.73

Correlation Coefficient

Xavis  Wemade Max

Poor diversification

The 3 months correlation between Xavis and Wemade is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and Wemade Max Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wemade Max and Xavis 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 Xavis Co are associated (or correlated) with Wemade Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wemade Max has no effect on the direction of Xavis i.e., Xavis and Wemade Max go up and down completely randomly.

Pair Corralation between Xavis and Wemade Max

Assuming the 90 days trading horizon Xavis Co is expected to generate 0.94 times more return on investment than Wemade Max. However, Xavis Co is 1.07 times less risky than Wemade Max. It trades about 0.05 of its potential returns per unit of risk. Wemade Max Co is currently generating about -0.07 per unit of risk. If you would invest  219,500  in Xavis Co on February 19, 2024 and sell it today you would earn a total of  16,500  from holding Xavis Co or generate 7.52% return on investment over 90 days.

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

Xavis Co  vs.  Wemade Max Co

Xavis

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xavis Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xavis may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Wemade Max

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wemade Max Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Xavis and Wemade Max

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

The idea behind Xavis Co and Wemade Max Co 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 CEOs Directory module to screen CEOs from public companies around the world.