Correlation Between Xcerra and MKS Instruments

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

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

Diversification Opportunities for Xcerra and MKS Instruments

0.0

Correlation Coefficient

Xcerra  MKS Instruments

Pay attention - limited upside

The 3 months correlation between Xcerra and MKS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xcerra and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments and Xcerra 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 Xcerra are associated (or correlated) with MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of Xcerra i.e., Xcerra and MKS Instruments go up and down completely randomly.

Pair Corralation between Xcerra and MKS Instruments

If you would invest (100.00) in Xcerra on January 26, 2024 and sell it today you would earn a total of  100.00  from holding Xcerra or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Xcerra  vs.  MKS Instruments

Xcerra

Risk-Adjusted Performance

0 of 100

Very Weak

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

MKS Instruments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MKS Instruments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, MKS Instruments is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Xcerra and MKS Instruments

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

The idea behind Xcerra and MKS Instruments 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.