Correlation Between Grounded People and XBP Europe

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

By analyzing existing cross correlation between Grounded People Apparel and XBP Europe Holdings, you can compare the effects of market volatilities on Grounded People and XBP Europe 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 Grounded People with a short position of XBP Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grounded People and XBP Europe.

Diversification Opportunities for Grounded People and XBP Europe

0.0

Correlation Coefficient

Grounded People  XBP Europe

Pay attention - limited upside

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

Pair Corralation between Grounded People and XBP Europe

If you would invest  4.00  in XBP Europe Holdings on December 20, 2024 and sell it today you would lose (1.48) from holding XBP Europe Holdings or give up 37.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	83.05%
Values	Daily Returns

Grounded People Apparel  vs.  XBP Europe Holdings

Grounded People Apparel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grounded People Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Grounded People is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

XBP Europe Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XBP Europe Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, XBP Europe showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grounded People and XBP Europe

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

The idea behind Grounded People Apparel and XBP Europe 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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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.