Correlation Between Exela Technologies and Cerence

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

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

Diversification Opportunities for Exela Technologies and Cerence

0.0

Correlation Coefficient

Exela Technologies  Cerence

Pay attention - limited upside

The 3 months correlation between Exela and Cerence is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Cerence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerence and Exela Technologies 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 Exela Technologies Preferred are associated (or correlated) with Cerence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerence has no effect on the direction of Exela Technologies i.e., Exela Technologies and Cerence go up and down completely randomly.

Pair Corralation between Exela Technologies and Cerence

If you would invest (100.00) in Exela Technologies Preferred on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Exela Technologies Preferred or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Exela Technologies Preferred  vs.  Cerence

Exela Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Exela Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Cerence

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cerence are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Cerence exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exela Technologies and Cerence

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

The idea behind Exela Technologies Preferred and Cerence 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.