Correlation Between Volitionrx and Xylo Technologies

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

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

Diversification Opportunities for Volitionrx and Xylo Technologies

-0.22

Correlation Coefficient

Volitionrx  Xylo Technologies

Very good diversification

The 3 months correlation between Volitionrx and Xylo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Volitionrx and Xylo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylo Technologies and Volitionrx 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 Volitionrx are associated (or correlated) with Xylo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xylo Technologies has no effect on the direction of Volitionrx i.e., Volitionrx and Xylo Technologies go up and down completely randomly.

Pair Corralation between Volitionrx and Xylo Technologies

Given the investment horizon of 90 days Volitionrx is expected to under-perform the Xylo Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Volitionrx is 1.58 times less risky than Xylo Technologies. The stock trades about -0.05 of its potential returns per unit of risk. The Xylo Technologies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  323.00  in Xylo Technologies on December 20, 2024 and sell it today you would earn a total of  177.00  from holding Xylo Technologies or generate 54.8% return on investment over 90 days.

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

Volitionrx  vs.  Xylo Technologies

Volitionrx

Risk-Adjusted Performance

Very Weak

Over the last 90 days Volitionrx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xylo Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xylo Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Xylo Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Volitionrx and Xylo Technologies

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

The idea behind Volitionrx and Xylo Technologies 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.