Correlation Between Kontrol Technologies and Xalles Holdings

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

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

Diversification Opportunities for Kontrol Technologies and Xalles Holdings

0.17

Correlation Coefficient

Kontrol Technologies  Xalles Holdings

Average diversification

The 3 months correlation between Kontrol and Xalles is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kontrol Technologies Corp and Xalles Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xalles Holdings and Kontrol 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 Kontrol Technologies Corp 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 Kontrol Technologies i.e., Kontrol Technologies and Xalles Holdings go up and down completely randomly.

Pair Corralation between Kontrol Technologies and Xalles Holdings

Assuming the 90 days horizon Kontrol Technologies is expected to generate 10.23 times less return on investment than Xalles Holdings. But when comparing it to its historical volatility, Kontrol Technologies Corp is 3.33 times less risky than Xalles Holdings. It trades about 0.02 of its potential returns per unit of risk. Xalles Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.04  in Xalles Holdings on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Xalles Holdings or generate 0.0% return on investment over 90 days.

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

Kontrol Technologies Corp  vs.  Xalles Holdings

Kontrol Technologies Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kontrol Technologies Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Kontrol Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Xalles Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xalles Holdings are ranked lower than 5 (%) 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 Kontrol Technologies and Xalles Holdings

The main advantage of trading using opposite Kontrol Technologies and Xalles Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontrol Technologies 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 Kontrol Technologies Corp 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.