Correlation Between Koss and XTM

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

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

Diversification Opportunities for Koss and XTM

-0.15

Correlation Coefficient

Koss  XTM

Good diversification

The 3 months correlation between Koss and XTM is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Koss Corp. and XTM Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTM Inc and Koss 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 Koss Corporation are associated (or correlated) with XTM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTM Inc has no effect on the direction of Koss i.e., Koss and XTM go up and down completely randomly.

Pair Corralation between Koss and XTM

Given the investment horizon of 90 days Koss Corporation is expected to generate 0.47 times more return on investment than XTM. However, Koss Corporation is 2.12 times less risky than XTM. It trades about -0.11 of its potential returns per unit of risk. XTM Inc is currently generating about -0.06 per unit of risk. If you would invest  694.00  in Koss Corporation on December 3, 2024 and sell it today you would lose (180.00) from holding Koss Corporation or give up 25.94% of portfolio value over 90 days.

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

Koss Corp.  vs.  XTM Inc

Koss

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koss Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

XTM Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days XTM Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Koss and XTM

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

The idea behind Koss Corporation and XTM Inc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.