Correlation Between Exail Technologies and Sidetrade

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

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

Diversification Opportunities for Exail Technologies and Sidetrade

0.35

Correlation Coefficient

Exail Technologies  Sidetrade

Weak diversification

The 3 months correlation between Exail and Sidetrade is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Exail Technologies SA and Sidetrade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidetrade and Exail Technologies 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 Exail Technologies SA are associated (or correlated) with Sidetrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidetrade has no effect on the direction of Exail Technologies i.e., Exail Technologies and Sidetrade go up and down completely randomly.

Pair Corralation between Exail Technologies and Sidetrade

Assuming the 90 days trading horizon Exail Technologies SA is expected to under-perform the Sidetrade. But the stock apears to be less risky and, when comparing its historical volatility, Exail Technologies SA is 1.13 times less risky than Sidetrade. The stock trades about -0.03 of its potential returns per unit of risk. The Sidetrade is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  20,000  in Sidetrade on September 15, 2024 and sell it today you would earn a total of  2,300  from holding Sidetrade or generate 11.5% return on investment over 90 days.

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

Exail Technologies SA  vs.  Sidetrade

Exail Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sidetrade

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sidetrade are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sidetrade may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Exail Technologies and Sidetrade

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

The idea behind Exail Technologies SA and Sidetrade 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.