Correlation Between Xalles Holdings and High Wire

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

By analyzing existing cross correlation between Xalles Holdings and High Wire Networks, you can compare the effects of market volatilities on Xalles Holdings and High Wire 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 High Wire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xalles Holdings and High Wire.

Diversification Opportunities for Xalles Holdings and High Wire

0.28

Correlation Coefficient

Xalles Holdings  High Wire

Modest diversification

The 3 months correlation between Xalles and High is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Xalles Holdings and High Wire Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Wire Networks 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 High Wire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Wire Networks has no effect on the direction of Xalles Holdings i.e., Xalles Holdings and High Wire go up and down completely randomly.

Pair Corralation between Xalles Holdings and High Wire

Given the investment horizon of 90 days Xalles Holdings is expected to under-perform the High Wire. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xalles Holdings is 1.59 times less risky than High Wire. The pink sheet trades about -0.04 of its potential returns per unit of risk. The High Wire Networks is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4.10  in High Wire Networks on September 4, 2024 and sell it today you would earn a total of  1.65  from holding High Wire Networks or generate 40.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Xalles Holdings  vs.  High Wire Networks

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 unfluctuating performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

High Wire Networks

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in High Wire Networks are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, High Wire demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xalles Holdings and High Wire

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

The idea behind Xalles Holdings and High Wire Networks 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.