Correlation Between XL Fleet and Stagwell

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

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

Diversification Opportunities for XL Fleet and Stagwell

-0.72

Correlation Coefficient

XL Fleet  Stagwell

Pay attention - limited upside

The 3 months correlation between XL Fleet and Stagwell is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding XL Fleet Corp and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell and XL Fleet 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 XL Fleet Corp are associated (or correlated) with Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of XL Fleet i.e., XL Fleet and Stagwell go up and down completely randomly.

Pair Corralation between XL Fleet and Stagwell

If you would invest  649.00  in Stagwell on September 19, 2024 and sell it today you would earn a total of  85.00  from holding Stagwell or generate 13.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.79%
Values	Daily Returns

XL Fleet Corp  vs.  Stagwell

XL Fleet Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Stagwell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Stagwell is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with XL Fleet and Stagwell

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

The idea behind XL Fleet Corp and Stagwell 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 Global Correlations module to find global opportunities by holding instruments from different markets.