Correlation Between Vasta PlatformLtd and Xander Resources

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

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

Diversification Opportunities for Vasta PlatformLtd and Xander Resources

0.52

Correlation Coefficient

Vasta PlatformLtd  Xander Resources

Very weak diversification

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

Pair Corralation between Vasta PlatformLtd and Xander Resources

If you would invest  3.55  in Xander Resources on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Xander Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	23.81%
Values	Daily Returns

Vasta PlatformLtd  vs.  Xander Resources

Vasta PlatformLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vasta PlatformLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Xander Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xander Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Vasta PlatformLtd and Xander Resources

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

The idea behind Vasta PlatformLtd and Xander Resources 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.