Correlation Between Foxx Development and Sidus Space

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

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

Diversification Opportunities for Foxx Development and Sidus Space

0.02

Correlation Coefficient

Foxx Development  Sidus Space

Significant diversification

The 3 months correlation between Foxx and Sidus is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Foxx Development Holdings and Sidus Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidus Space and Foxx Development 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 Foxx Development Holdings are associated (or correlated) with Sidus Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidus Space has no effect on the direction of Foxx Development i.e., Foxx Development and Sidus Space go up and down completely randomly.

Pair Corralation between Foxx Development and Sidus Space

Given the investment horizon of 90 days Foxx Development Holdings is expected to under-perform the Sidus Space. But the stock apears to be less risky and, when comparing its historical volatility, Foxx Development Holdings is 5.17 times less risky than Sidus Space. The stock trades about -0.03 of its potential returns per unit of risk. The Sidus Space is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  135.00  in Sidus Space on October 12, 2024 and sell it today you would earn a total of  137.00  from holding Sidus Space or generate 101.48% return on investment over 90 days.

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

Foxx Development Holdings  vs.  Sidus Space

Foxx Development Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foxx Development Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sidus Space

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sidus Space are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Sidus Space unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Foxx Development and Sidus Space

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

The idea behind Foxx Development Holdings and Sidus Space 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.