Correlation Between Xenonics Holdings and Espey Mfg

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

By analyzing existing cross correlation between Xenonics Holdings and Espey Mfg Electronics, you can compare the effects of market volatilities on Xenonics Holdings and Espey Mfg 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 Xenonics Holdings with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenonics Holdings and Espey Mfg.

Diversification Opportunities for Xenonics Holdings and Espey Mfg

0.0

Correlation Coefficient

Xenonics Holdings  Espey Mfg

Pay attention - limited upside

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

Pair Corralation between Xenonics Holdings and Espey Mfg

If you would invest (100.00) in Xenonics Holdings on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Xenonics Holdings 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

Xenonics Holdings  vs.  Espey Mfg Electronics

Xenonics Holdings

Risk-Adjusted Performance

Very Weak

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

Espey Mfg Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Espey Mfg Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Xenonics Holdings and Espey Mfg

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

The idea behind Xenonics Holdings and Espey Mfg Electronics 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.