Correlation Between High Wire and Xalles Holdings

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

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

Diversification Opportunities for High Wire and Xalles Holdings

-0.25

Correlation Coefficient

High Wire  Xalles Holdings

Very good diversification

The 3 months correlation between High and Xalles is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding High Wire Networks and Xalles Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xalles Holdings and High Wire 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 High Wire Networks are associated (or correlated) with Xalles Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xalles Holdings has no effect on the direction of High Wire i.e., High Wire and Xalles Holdings go up and down completely randomly.

Pair Corralation between High Wire and Xalles Holdings

Given the investment horizon of 90 days High Wire is expected to generate 1.03 times less return on investment than Xalles Holdings. But when comparing it to its historical volatility, High Wire Networks is 1.32 times less risky than Xalles Holdings. It trades about 0.07 of its potential returns per unit of risk. Xalles Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Xalles Holdings on December 27, 2024 and sell it today you would lose (0.01) from holding Xalles Holdings or give up 20.0% of portfolio value over 90 days.

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

High Wire Networks  vs.  Xalles Holdings

High Wire Networks

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in High Wire Networks are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, High Wire demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Xalles Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xalles Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Xalles Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with High Wire and Xalles Holdings

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

The idea behind High Wire Networks and Xalles 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.

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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.