Correlation Between Blackberry and Xtep International

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Can any of the company-specific risk be diversified away by investing in both Blackberry and Xtep International 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 Blackberry and Xtep International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackberry and Xtep International Holdings, you can compare the effects of market volatilities on Blackberry and Xtep International 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 Blackberry with a short position of Xtep International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackberry and Xtep International.

Diversification Opportunities for Blackberry and Xtep International

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Blackberry and XTPEF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Blackberry and Xtep International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtep International and Blackberry 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 Blackberry are associated (or correlated) with Xtep International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtep International has no effect on the direction of Blackberry i.e., Blackberry and Xtep International go up and down completely randomly.

Pair Corralation between Blackberry and Xtep International

Allowing for the 90-day total investment horizon Blackberry is expected to under-perform the Xtep International. But the stock apears to be less risky and, when comparing its historical volatility, Blackberry is 1.7 times less risky than Xtep International. The stock trades about -0.06 of its potential returns per unit of risk. The Xtep International Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  53.00  in Xtep International Holdings on August 28, 2022 and sell it today you would earn a total of  95.00  from holding Xtep International Holdings or generate 179.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Blackberry  vs.  Xtep International Holdings

 Performance (%) 
       Timeline  
Blackberry 
Blackberry Performance
0 of 100
Over the last 90 days Blackberry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Blackberry Price Channel

Xtep International 
XTPEF Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Xtep International Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Xtep International exhibited solid returns over the last few months and may actually be approaching a breakup point.

XTPEF Price Channel

Blackberry and Xtep International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blackberry and Xtep International

The main advantage of trading using opposite Blackberry and Xtep International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackberry position performs unexpectedly, Xtep International 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 Xtep International will offset losses from the drop in Xtep International's long position.
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The idea behind Blackberry and Xtep International Holdings 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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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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