Correlation Between Xenetic Biosciences and United States
Can any of the company-specific risk be diversified away by investing in both Xenetic Biosciences and United States 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 Xenetic Biosciences and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenetic Biosciences and United States 12, you can compare the effects of market volatilities on Xenetic Biosciences and United States 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 Xenetic Biosciences with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenetic Biosciences and United States.
Diversification Opportunities for Xenetic Biosciences and United States
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xenetic and United is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xenetic Biosciences and United States 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States 12 and Xenetic Biosciences 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 Xenetic Biosciences are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States 12 has no effect on the direction of Xenetic Biosciences i.e., Xenetic Biosciences and United States go up and down completely randomly.
Pair Corralation between Xenetic Biosciences and United States
Given the investment horizon of 90 days Xenetic Biosciences is expected to generate 2.45 times less return on investment than United States. In addition to that, Xenetic Biosciences is 5.47 times more volatile than United States 12. It trades about 0.01 of its total potential returns per unit of risk. United States 12 is currently generating about 0.11 per unit of volatility. If you would invest 3,938 in United States 12 on January 20, 2024 and sell it today you would earn a total of 79.00 from holding United States 12 or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenetic Biosciences vs. United States 12
Performance |
| Timeline |
| Xenetic Biosciences |
| United States 12 |
Xenetic Biosciences and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenetic Biosciences and United States
The main advantage of trading using opposite Xenetic Biosciences and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenetic Biosciences position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.The idea behind Xenetic Biosciences and United States 12 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.| United States vs. Invesco DB Oil | United States vs. United States Gasoline | United States vs. United States Brent | United States vs. United States 12 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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