Correlation Between Xalles Holdings and Nagarro SE

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

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

Diversification Opportunities for Xalles Holdings and Nagarro SE

0.11

Correlation Coefficient

Xalles Holdings  Nagarro SE

Average diversification

The 3 months correlation between Xalles and Nagarro is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Xalles Holdings and Nagarro SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nagarro SE 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 Nagarro SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nagarro SE has no effect on the direction of Xalles Holdings i.e., Xalles Holdings and Nagarro SE go up and down completely randomly.

Pair Corralation between Xalles Holdings and Nagarro SE

Given the investment horizon of 90 days Xalles Holdings is expected to generate 6.08 times more return on investment than Nagarro SE. However, Xalles Holdings is 6.08 times more volatile than Nagarro SE. It trades about 0.07 of its potential returns per unit of risk. Nagarro SE is currently generating about 0.0 per unit of risk. If you would invest  0.04  in Xalles Holdings on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Xalles Holdings or generate 0.0% return on investment over 90 days.

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

Xalles Holdings  vs.  Nagarro SE

Xalles Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xalles Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Xalles Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Nagarro SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nagarro SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nagarro SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Xalles Holdings and Nagarro SE

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

The idea behind Xalles Holdings and Nagarro SE 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.