Correlation Between Stoneridge and Xpel

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

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

Diversification Opportunities for Stoneridge and Xpel

-0.09

Correlation Coefficient

Stoneridge  Xpel

Good diversification

The 3 months correlation between Stoneridge and Xpel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and Xpel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpel Inc and Stoneridge 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 Stoneridge are associated (or correlated) with Xpel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xpel Inc has no effect on the direction of Stoneridge i.e., Stoneridge and Xpel go up and down completely randomly.

Pair Corralation between Stoneridge and Xpel

Considering the 90-day investment horizon Stoneridge is expected to generate 1.7 times more return on investment than Xpel. However, Stoneridge is 1.7 times more volatile than Xpel Inc. It trades about -0.03 of its potential returns per unit of risk. Xpel Inc is currently generating about -0.1 per unit of risk. If you would invest  607.00  in Stoneridge on December 22, 2024 and sell it today you would lose (106.00) from holding Stoneridge or give up 17.46% of portfolio value over 90 days.

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

Stoneridge  vs.  Xpel Inc

Stoneridge

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stoneridge has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Xpel Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xpel Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Stoneridge and Xpel

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

The idea behind Stoneridge and Xpel 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.