Correlation Between Xcel Brands and Superior Uniform

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

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

Diversification Opportunities for Xcel Brands and Superior Uniform

-0.17

Correlation Coefficient

Xcel Brands  Superior Uniform

Good diversification

The 3 months correlation between Xcel and Superior is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Xcel Brands and Superior Uniform Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Uniform and Xcel Brands 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 Xcel Brands are associated (or correlated) with Superior Uniform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Uniform has no effect on the direction of Xcel Brands i.e., Xcel Brands and Superior Uniform go up and down completely randomly.

Pair Corralation between Xcel Brands and Superior Uniform

Given the investment horizon of 90 days Xcel Brands is expected to under-perform the Superior Uniform. In addition to that, Xcel Brands is 3.89 times more volatile than Superior Uniform Group. It trades about -0.08 of its total potential returns per unit of risk. Superior Uniform Group is currently generating about 0.07 per unit of volatility. If you would invest  1,457  in Superior Uniform Group on October 23, 2024 and sell it today you would earn a total of  121.00  from holding Superior Uniform Group or generate 8.3% return on investment over 90 days.

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

Xcel Brands  vs.  Superior Uniform Group

Xcel Brands

Risk-Adjusted Performance

0 of 100

Very Weak

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

Superior Uniform

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Superior Uniform Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Superior Uniform may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Xcel Brands and Superior Uniform

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

The idea behind Xcel Brands and Superior Uniform 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.