Correlation Between Xalles Holdings and Alithya

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

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

Diversification Opportunities for Xalles Holdings and Alithya

0.3

Correlation Coefficient

Xalles Holdings  Alithya

Weak diversification

The 3 months correlation between Xalles and Alithya is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Xalles Holdings and Alithya Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alithya Group and Xalles Holdings 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 Xalles Holdings are associated (or correlated) with Alithya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alithya Group has no effect on the direction of Xalles Holdings i.e., Xalles Holdings and Alithya go up and down completely randomly.

Pair Corralation between Xalles Holdings and Alithya

If you would invest  0.05  in Xalles Holdings on September 14, 2024 and sell it today you would earn a total of  0.01  from holding Xalles Holdings or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Xalles Holdings  vs.  Alithya Group

Xalles Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xalles Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Xalles Holdings is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Alithya Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alithya Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alithya is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xalles Holdings and Alithya

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

The idea behind Xalles Holdings and Alithya Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.