Correlation Between XT Token and AUC

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

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

Diversification Opportunities for XT Token and AUC

0.91

Correlation Coefficient

XT Token  AUC

Almost no diversification

The 3 months correlation between XT Token and AUC is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding XT Token and AUC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUC and XT Token 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 XT Token are associated (or correlated) with AUC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUC has no effect on the direction of XT Token i.e., XT Token and AUC go up and down completely randomly.

Pair Corralation between XT Token and AUC

Assuming the 90 days horizon XT Token is expected to generate 1.09 times less return on investment than AUC. In addition to that, XT Token is 1.14 times more volatile than AUC. It trades about 0.17 of its total potential returns per unit of risk. AUC is currently generating about 0.21 per unit of volatility. If you would invest  0.19  in AUC on April 24, 2025 and sell it today you would earn a total of  0.05  from holding AUC or generate 26.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

XT Token  vs.  AUC

XT Token

Risk-Adjusted Performance

OK

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

AUC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AUC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, AUC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XT Token and AUC

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

The idea behind XT Token and AUC 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.