Correlation Between X Square and LifeGoal Investments

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

By analyzing existing cross correlation between X Square Balanced and LifeGoal Investments, you can compare the effects of market volatilities on X Square and LifeGoal Investments 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 X Square with a short position of LifeGoal Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Square and LifeGoal Investments.

Diversification Opportunities for X Square and LifeGoal Investments

-0.1

Correlation Coefficient

X Square  LifeGoal Investments

Good diversification

The 3 months correlation between SQBFX and LifeGoal is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding X Square Balanced and LifeGoal Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeGoal Investments and X Square 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 X Square Balanced are associated (or correlated) with LifeGoal Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeGoal Investments has no effect on the direction of X Square i.e., X Square and LifeGoal Investments go up and down completely randomly.

Pair Corralation between X Square and LifeGoal Investments

If you would invest  1,198  in X Square Balanced on September 13, 2024 and sell it today you would earn a total of  231.00  from holding X Square Balanced or generate 19.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

X Square Balanced  vs.  LifeGoal Investments

X Square Balanced

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in X Square Balanced are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, X Square is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

LifeGoal Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LifeGoal Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, LifeGoal Investments is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with X Square and LifeGoal Investments

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

The idea behind X Square Balanced and LifeGoal Investments 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.